Hurry up! End policy uncertainty over investments

Daily Mirror, in its Wednesday edition, reported that China-based Amber Adventures (Private) Limited—the country’s first cable car venture—had officially pulled out of the Ambuluwawa Cable Car Project, citing what it called “regulatory obstruction and arbitrary state action”.
It informed the Board of Investment (BOI) in writing on January 13 that it had decided to withdraw from the project due to what it termed arbitrary and unlawful actions by state authorities, including the suspension of construction by the Central Environmental Authority (CEA) based on complaints circulating on social media, despite clearance from technical agencies.
Later, Environment Minister Dr. Dammika Patabendi said that he instructed the Ministry to look into the matter, stating that the government was not keen on any investor leaving the country, as reported by the Daily Mirror.
Sri Lanka, as a country, has witnessed improvements on the fiscal and external fronts since the 2022 economic crisis. Yet, this is only the first step in economic development. The country has to accelerate its growth rate for the creation of jobs, which will eventually translate into improved living standards. The attraction of foreign direct investment (FDI) in substantial volumes is a prerequisite for accelerating economic growth. Unfortunately, successive governments have not only failed to improve the country’s investment climate,  but have also made mistakes that discouraged both existing and prospective investors.
The lack of progress in the ease of doing business index and the absence of policy continuity have kept investors at bay. As a result, Sri Lanka has lost its competitive advantage to its neighbouring peers.
The latest withdrawal of a company from a cable car project will dent investor confidence in the country. It appears that the current government, which came to power on the plank of bringing about system change in every sphere, has not learnt from the mistakes committed by its predecessors. For example, the Yahapalana government, which came to power in 2015, sought to scrap the Colombo Port City project—a US$ 1.4 billion Chinese investment with a strategic outlook. Subsequently, it was renegotiated and implemented with amendments to the original terms and conditions.
No matter what, it is always unwise to rescind or alter a Cabinet decision following changes in government at periodic elections. A Cabinet decision may be riddled with flaws and may not conform to the policies of an incoming government. Its implementation might entail some issues. Still, project cancellation sends a wrong signal to the world. It can even entail far-reaching consequences for the country and may outweigh any gains on the domestic front.
The current government, led by the National People’s Power (NPP), has not learnt from this reality, as it acted in a manner that led India’s Adani Group to withdraw from renewable energy projects in the north.
 Adani Green Energy planned a major 484 MW wind power project in Sri Lanka (Mannar/Pooneryn) but withdrew in early 2025 after the new Sri Lankan government sought to renegotiate the agreed-upon energy tariffs. The energy tariffs quoted by the company may have been too expensive for Sri Lanka. Yet, the company’s withdrawal is read differently by foreign investors. It will prompt any investor to think twice before putting money on the ground here.
The cable car project in Ambuluwawa is the latest addition to these mistakes. The government needs to correct the situation immediately. It is now working on the proposed investment protection law. Such a law is the need of the hour. The government is now in the second year of its term. Speedy action should be taken on such legislative work. Of course, it is important to have broad consultations involving all stakeholders. Yet, there should not be any inordinate delay in the formulation of the proposed piece of legislation.
The government has the necessary parliamentary strength to enact any piece of legislation. Legal protection of investments will boost confidence. Along with the enactment of such a law, the country should also dispense with archaic laws and policies that hinder growth.
Sri Lanka stands at a critical juncture where economic stabilisation must now be followed by credible growth-oriented reforms.  As long as investor confidence remains fragile, it is difficult to be done. Arbitrary regulatory actions, policy reversals and project cancellations undermine the country’s attractiveness at a time when foreign capital is urgently needed.
If the government  is serious about long-term recovery, it must ensure policy continuity, protect investments through strong legal frameworks and decisively remove institutional bottlenecks that deter investors.