Dr. De Silva was responding to news reports that Krrish paid Rs. 1.4 billing last week bringing the total advance to Rs. 2 billion (40%) out of Rs. 5 billion due.
“Deputy Minister Abeywardena told Parliament that Krrish will pay 100% by 15 December which hasn’t happened. He can’t mislead the House since Parliament has the full control of finance and it is Parliament that approved massive tax breaks running into 25 years for Krrish based on the information submitted to Parliament under the Strategic Investment Bill. If those conditions are not met then the tax breaks and other incentives must be pulled out and or agreement cancelled,” UNP MP said.
“The Government can’t take Parliament for a joke, particularly if they are hell-bent on saying the Parliament is supreme,” quipped Dr. De Silva.
Deputy Minister Abeywardena in response to questions raised by UNP said that Krish had paid 10% as advance and the balance 90% will be paid when the Indian firm signs agreement with Urban Development Authority (UDA) on 14 December.
In his answer as per hansard copy of 24 November proceedings, Abeywardena also described 10% as $ 49 million. This meant that the balance amounts to $ 441 million (which is Rs. 57.3 billion). In fact $ 49 million being 10% was said twice during his answer. It appears that Deputy Minister has got the numbers wrong judging by Krrish announcement that the full lease amount is only Rs. 5 billion.
The investment of Krrish’s project is $ 411 million.
In its announcement Krrish said the advancement of Rs. 1.4 billion last week bringing the total to Rs. 2 billion whilst UDA was still processing the handover of the lease, was to demonstrate Indian firm’s commitment towards Sri Lanka and the prestigious project.
Dr. De Silva recently expressed hope that this agreement was signed on 15 December and the government will make the announcement. “However if Krrish Group is either unable or unwilling to meet the conditions of the revised agreement the Government must take immediate steps to cancel this agreement on underperformance as per the expropriation legislation enacted last year that was selectively applied only on certain identified investors,” UNP MP added.
The Government by Extraordinary Gazette 1778/3 dated 1 October 2012 notified that the Krrish project had been identified as a strategic development project and approved a large number of benefits including 25 year tax breaks on income, on dividends to shareholders, on PAYE by employees. Furthermore it provided exemptions on withholding tax, on VAT and on PAL and also from customs duty.
Titled ‘Krrish Square’ at the Transworks Square in Fort, the project would be one of the finest residential and commercial projects in Asia. Krrish Group will make the heritage building one of most sought-after luxury heritage resort hotels in this part of the world. In line with the group’s commitment to excellence and quality, and having attained prominence in the Indian subcontinent, the Krrish Group said it was poised to bring world class, luxurious residential and commercial spaces to Colombo.