Grand Hyatt Colombo: Decade-Long Dream Awaits Redemption

The Government’s decision to proceed with the long-delayed Grand Hyatt Colombo divestiture, reappointing Deloitte as the transaction adviser, has rekindled cautious optimism while deepening anxiety among investors, state institutions, and apartment buyers who have waited more than a decade for closure.

Initially launched in 2006 under the Ceylinco Group led by businessman Lalith Kotelawala, the project was envisioned as Sri Lanka’s first Grand Hyatt-branded luxury hotels 47-storey landmark featuring 458 hotel rooms and up to 100 serviced apartments. However, the collapse of Ceylinco following the Golden Key credit scandal in 2008 brought construction to a halt.

In 2012, the property was taken over by the state and transferred to Canwill Holdings (Pvt) Ltd, a joint venture between Sri Lanka Insurance Corporation, Litro Gas, and the Employees’ Provident Fund (EPF). Despite multiple relaunches and promises, the project remains incomplete, its skeletal frame standing as a reminder of stalled ambition at the heart of Colombo’s skyline.

With costs now estimated to exceed US$120 million (Rs. 36 billion), the government has decided to sell its 75% stake in Canwill Holdings to a strategic investor capable of completing the venture. According to Finance Ministry sources, Deloitte has been tasked with preparing an Information Memorandum (IM) outlining the company’s assets, liabilities, and pending claims including those from long-waiting apartment purchasers. Once the IM is finalized, Expressions of Interest (EOIs) will be sought from potential investors.

For apartment buyers who paid deposits years ago, uncertainty looms large. There is no official record detailing how many units were sold or how much money was collected, and with no escrow or legal safeguards, many risk being treated as unsecured creditors in the divestiture process. Legal experts insist that their rights must be recognized in any new agreement to avoid further injustice.

Meanwhile, state stakeholders such as Sri Lanka Insurance and Litro Gas face pressure to recover public funds estimated between Rs. 18–21 billion already sunk into the project. The Auditor General’s 2023 report also flagged accounting irregularities, including a Rs. 2 billion share issue discrepancy, highlighting governance lapses.

Economists describe the sale as a necessary but delicate balancing act one that could finally bring closure or deepen mistrust. For hundreds of hopeful homeowners and taxpayers alike, the fate of the Grand Hyatt Colombo now rests on whether this latest revival can deliver on promises left unfulfilled for more than a decade.