The Sri Lankan government is to take over a high rise hotel and apartment tower whose construction was stalled after its parent firm got into financial trouble.
The takeover is to be effected under a new law that is being rushed through the judicial and parliamentary approvals process that provides for the state to take over what are identified as 'underperforming enterprises and underutilized assets'.
Minister of economic development Basil Rajapaksa said the take over of the Celestial Residencies tower project designed to house a five star hotel and apartments is with the aim of completing the project.
"The government will take over the project and pay compensation to those who bought apartments," he told a news conference.
A committee of officials has been formed to revive construction work and complete the project as further delays might make it unusable with steel already used in the building beginning to rust, he said.
"We want to build the tower quickly as the steel is beginning to rust," Rajapaksa said.
A fund is to be created to pay compensation to apartment owners.
The planned 45-storey Celestial Residencies tower is owned by Ceylinco Homes International Lotus Tower, part of the Ceylinco group which got into trouble after a run on a finance company subsidiary.
Construction work was later abandoned and the building has been put up for sale.
Rajapaksa said the takeover will be done under a new law to be introduced to parliament as an "urgent bill" on which the government Friday sought the opinion of the supreme court which he said was expected in 48 hours.
News reports on the proposed law said it can be used to seize privately owned businesses identified as 'underperforming' or 'underutilized' on in the 'national interest'.
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