Sri Lankan red tape still deterring investments, tourism forum told

ECONOMYNEXT – Approvals for new projects in Sri Lanka are still too slow with red tape and official lethargy deterring investments, although the new government is acutely aware of the need to speed up decision-making, a hospitality forum was told.

Bureaucrats seem more keen to prevent investors rather than helping them with political influence still needed to get things done, officials from the private sector tourism industry told the two-day Indian Ocean Hospitality Investment Conference Indian Ocean in Colombo.

Although Sri Lankan hotel firms invested in the Maldives during the ethnic conflict to hedge for war risk, Maldivian investments were not coming to the island even seven years after the war ended.

Mohamed Khaleel, Chief Operating Officer of Reollo Investments, a supplier of merchandise and services to the tourist industry in the Maldives said there was still far too much red tape in Sri Lanka.

But conditions were now improving and that was why international brands were entering the country, he told the forum organised by Sphere Conferences, the conference arm of Singapore Press Holdings Limited.

"You have a lot of red tape in the country – lengthy procedures to buy land, legal procedures are more complicated than in other countries, although this is now changing," he said.

Tilak Selviah, Director and Chief Operating Officer of the Leisure Sector of Browns Investments, part of the LOLC group which is investing heavily in tourism, concurred.

"The motivation of government authorities to support investments is very limited," he told the forum. "You don’t find people wanting to help. They actually come up with ways to prevent you from what you want to do.

"We are building a hotel in Kosgoda, a difficult area and we’re had all kinds of interference,” he said. “If the government expects tourism to be the number one foreign exchange earner they should have a fast track mechanism. We need to have strong political influence to be able to get things done."

Thilan Wijesinghe, Director of Ceylon Tea Trails, which operates boutique hotels, said the new government was aware of the problem and trying to speed up approvals.





"There is an acute recognition within the government of procedural delays investors face," he said. "New laws have been mooted and the proposed agency for development will be given power to cut through red tape."

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