ITC Ltd. of India is to invest USD 300 million to set up a luxury hotel in Colombo, the government said on Thursday.

The government has approved a USD 300 million foreign direct investment enabling the hotel to be built on 5 acres of land in close proximity to military headquarters in Colombo’s famous Galle Face landmark beachfront on a 99-year lease.

“ITCL is a reputed hotel investment group in India, with investments and hotel in India. The government hopes that its presence in Sri Lanka will be a significant contribution toward promoting FDI and the tourism industry in the country,” the government information department said.

The Board of Investment of Sri Lanka is to enter a memorandum of understanding with ITCL enabling the firm to execute the project under concessionary tax terms with permitted exemptions on investments.

This block of land was earlier allocated to China Aviation Technology Import Export Corporation (CATIC) for USD 73.5 million for a similar project.

The Chinese firm later withdrew and the Sri Lankan government is in the process of reimbursing USD 54.4 million dollars already paid by CATIC for the lease of land.

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