In the wake of a high regulatory powered investment promotion agency (authority) to attract more foreign direct investment (FDI), the Board of Investment of Sri Lanka (BOI) will be granted more powers.
Investment Promotion State Minister Dilum Amunugama stated that BOI will be given more powers in future to further facilitate investors through speedy approvals for investment projects, thereby easing the ease of doing business.
He stressed that the new powers would see investors being given more efficient clearance processes for relevant projects, offering investors additional certainty and clarity.
The State Minister made these remarks during a discussion held with the BOI trade union representatives recently.
However his statement has no reference to ongoing process of rehauling of BOI operations under separate agency in accordance with proposal made by President Ranil Wickremasinghe in his capacity as the finance minister of the country,
Special committee appointed by President Ranil Wickremasinghe has already made a recommendation to set up this new agency by bringing the Board of Investment (BOI), the Export Development Board (EDB) and the Sri Lanka Export Credit Insurance Corporation (SLECIC) together into one platform.
National Enterprise Development Authority (NEDA) and other entities that support exports and investments will also come under the purview of the new agency.
The budget 2023 has allocated Rs 100 million to implement the investment and export sector reforms expeditiously.
These institutions connected to investment and exports will function under the proposed new agency following the re-enacting of 1978 Greater Colombo Economic Commission (GCEC) laws making it compatible with modern day needs.
The government has taken this decision after evaluating the performance of the these institutions during the recent past.
On average, it takes around 170 days to approve an investment project in Sri Lanka as these processes involve over 40 line agencies, it has been observed.
At present there are 73 project proposals that are still to get approval at around 10 different agencies. The delay in approving the projects is not auger well for investors.
“It is evident that the modus operandi in obtaining necessary approvals for investment projects causes significant hindrances to investors, which has a considerable bearing on the willingness and confidence of the investors to continue their business. In fact, some projects require approvals from 70 institutions,” Amunugama highlighted.
“In this context, attention has been drawn to leveraging a business model called the plug-and-play model where all clearances and other prerequisites will be in place before the project is awarded to any investor.
Here, the business firms are not required to focus on the basic requirements for setting up a business as everything is arranged by the relevant authority, which would be the BOI,” he explained.
“With the new powers in place, the BOI will be equipped to act more independently and effectively and thus, upbeat about wooing more investors to Sri Lana,” Amunugama added.