New govt. initiative to ease land access for industries and investors soon

• Deputy Minister Abeysinghe acknowledges that acquiring land to start or expand a business or even for a foreign investor to select a suitable land plot has been a difficult task 
• Points out business owners often have to navigate multiple institutions and political channels to obtain land
• Common road map to be developed within next few months
• Assures government would collaborate with stakeholders to reduce high cost of manufacturing, including addressing inefficiencies in current tariff policies

The government is set to establish a national level initiative ‘very soon’ to replace the existing inefficient land allocation mechanisms, which have been identified as a key impediment to industrial development and export growth.

Due to land fragmentation, underutilisation and a complex regulatory framework, industries have been struggling to secure the necessary land for new initiatives as well as expansions.

“Even now, certain things are becoming clearer in the sector we want to focus on. We have set a very ambitious target of about US $ 46 billion in exports within five years and we believe that together, we can achieve it. One of the biggest challenges for industries, land allocation, will be resolved very soon,” Industries and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe said.

He made these remarks at the Annual General Meeting of the National Chamber of Sri Lanka, held in Colombo, last week.

He revealed that the government is in the process of launching a national level initiative to ensure efficient land allocation for industries.

“Securing land to start or expand a business or even for a foreign investor to select a suitable land plot has been a difficult task in this country. Business owners often have to navigate multiple institutions and political channels to obtain land. With this new initiative, you will see a streamlined national level approach,” he said.

According to the Harvard Centre for International Development, land-related issues have been identified as a key constraint to industrial development in Sri Lanka. The report highlighted that even the existing industries struggle with land shortages, as the government owns over 75 percent of the country’s land. 

Additionally, the report pointed out that the occupancy rates in the Board of Investment zones remain very high, with insufficient new zones being developed, forcing investors to seek multiple approvals and delaying their investment plans.

Abeysinghe also disclosed that the government, in collaboration with the industries and chambers, would develop a common road map within the next few months. Each stakeholder will have defined responsibilities, with a focus on achieving targets with greater transparency for the public.

He emphasised the government’s commitment to maintaining consistency and clarity in its policies, particularly concerning industrial development.

“That is something we have lacked for many years. Policies kept changing, taxes kept fluctuating. Sri Lanka has not had a consistent industrial policy or a clear vision on which industries will drive growth and take the country to the next level. The government, in collaboration with the business community, will provide that clarity very soon,” he added.

Under this unified approach, he expressed optimism that the currently fragmented structures of multiple institutions would begin working together more cohesively.

Furthermore, he assured that the government would collaborate with the stakeholders to reduce the high cost of manufacturing, including addressing inefficiencies in the current tariff policies, to create a level playing field for businesses.

“It is clear that Sri Lanka must emerge from the current debt crisis and adopt a different approach to its legal frameworks to ensure fair competition for businesses, especially manufacturers. We acknowledge that the playing field has not been fair thus far. Manufacturing costs have continued to rise and the tariff policies have been disadvantageous to the local manufacturers and businesses. This must change,” he said. 

(NF)