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 Lotus Tower blooms while Chinese debt looms

US$ 104.3 million China Exim Bank funded Lotus Tower will be blooming from Monday (16), with its sustenance depending on the performance of a new State Owned Enterprise (SOE) set up to operate it as a commercial entity.
With all those issues of malpractices, corruption and construction delays hanging over the project, the Lotus Tower will be opened by President Maithripala Sirisena tomorrow.
The Lotus Tower, with a striking resemblance to Sri Lanka Podujana Peramuna's (SLPP) symbol, was initiated during the previous Rajapaksa regime through an unsolicited proposal.
The new Lotus Tower management SOE will add to the burden of maintaining more than 400 public enterprises, most of which are loss making institutions with over a million employees.

When the Government has failed to manage SOEs due to official inefficiency and lack of productivity, the decision to hand over the Lotus Tower to another similar state entity does not augar well for the country, economic analysts said.  

Be that as it may, the government has decided to vest the proposed television tower and the entertainment centre in a management consultancy company as a Public Company under the ownership of the Sri Lanka Telecommunication Regulatory Commission (TRC).

The company is to be enlisted it in the Colombo Stock Exchange and to issue a share capital of 30 per cent through an initial public issue.

However, in terms of the Sri Lanka Telecommunication Act, and the Sri Lanka Telecommunication (Amendment) Act, the TRC has no powers to implement the proposal .

By reason of impossibility of establishing a company in terms of the Telecommunication Act, several steps had been taken to lease the Colombo Lotus Tower to a property management company.

From the start of Tower constructions by two Chinese companies in November 2012, it has faced multiple delays and charges of mismanagement and fund wastage which were highlighted by the Auditor General.

Although the period for completing the Project was 912 days, it had been extended up to October 2017, and it was not completed until this year delaying the completion of the project by more than 500 days.

The total amount of the loan of US$ 88,655,000 had been utilized in the computation of the agreed charges from the beginning but it was reported that US$ 636,508 had been over paid.

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