The Cabinet has approved the proposal to appoint a committee to investigate whether the government has incurred a financial loss from the Grand Hyatt Project due to alleged irregularities committed by the previous management of the Sino Lanka (Pvt) Ltd, the state information office said.

The Grand Hyatt Hotel Project is implemented by the Sino Lanka (Pvt) Ltd, which is a subsidiary of the Sri Lanka Insurance Corporation, Employees’ Provident Fund and Litro Gas Lanka Ltd. The hotel was scheduled to open in the first quarter of 2016 afterwards the completion of construction.

“Most of the agreements signed by the previous government were terminated by the new board of directors of the Sino Lanka (Pvt) Ltd which was appointed following the 2015 presidential election without any justifiable reason and has been entered into agreements with new contractors for aforementioned work phases," it said.

“Therefore, some companies have initiated legal proceedings and it has been decided that the Sino Lanka (Pvt) Ltd shall pay approximately a sum of Rs.1.8 billion as compensation. The current cost of the the project, which was originally planned to be completed at an estimated cost of Rs.30 billion, is re-estimated to be around Rs.60 billion."

“Accordingly, the approval was granted by the Cabinet to a proposal tabled by Prime Minister as the Minister of Finance to appoint a committee to investigate whether the government has incurred a financial loss as it appears that the situation has arisen due to the irregularities committed by the previous management of the Sino Lanka (Pvt) Ltd," it added.