He said four parties who got land had not used the land so far.
"If they do not start construction within the next two months we will cancel the agreements with four investors," Abeywardene told reporters.
"Warning letters will be sent this week.
"
He said there was one party with Maldivian involvement.
Five hotels are expected to be completed in the stretch of state land by December 2011, and five more in March, April and July next year, he said.
The Eastern coasts are sunny and warm after the so-called 'winter season' ends in the Eastern coast.
'Malu Malu' a resort by Sri Lanka's Connaissance group has already opened.
The hotels will add about a 1,000 rooms to national capacity and give employment to about 4,000 people, mainly from the immediate area, he said.
A helicopter landing pad was being and within six months key infrastructure including power would be supplied.
It will also benefit the local community he said.
The central government was also build