Sri Lanka military HQ to make way for hotels

January 26, 2011 (AFP) - The Sri Lankan government said Wednesday it was relocating the defence ministry and main army headquarters in Colombo to make way for a billion-dollar hotel project. An information department statement said the cabinet had decided to shift the military facilities from their prime, seafront location in the capital to the eastern edge of the city.

The move would accommodate "two giant foreign (hotel) projects that will bring in a direct investment of $1 billion," an information department statement said.

Sri Lanka's military has been expanding its commercial operations since the defeat of the separatist Tamil Tiger rebel movement in May 2009.

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It already runs small restaurants and kiosks along the main highway across the island's former northern war zone, and operates a lucrative vegetable business in competition with private traders. Tourism has boomed after the end of the island's ethnic conflict that had previously deterred both foreign investors and holiday makers.

Hong Kong-based Shangri La leisure group announced earlier this month that it had paid 5 million for a 99-year lease on the Sri Lankan army's sports grounds to build a deluxe hotel.