UDA Chairman Dr. Jagath Munasinghe and SLTDA Chairman Kavan Ratnayaka exchange MoUs in the presence of SLTDA Director General P.U. Rathnayake (extreme right) and USAID Acting Mission Director Elizabeth Davine-Easton (third from right)
Pic by Waruna Wanniarachchi

• Plans to cut investment approval time by half
• SLTDA plans to partner with over 40 State agencies

By Nishel Fernando

The Sri Lanka Tourism Development Authority (SLTDA) this week partnered with the Urban Development Authority (UDA) to expedite the investment approval process by streaming it to cut down the project approval time period by half and reduce costs. 

SLTDA Chairman Kavan Ratnayaka and UDA Chairman Dr. Jagath Munasinghe formalised the agreement on behalf of the two entities at Ramada hotel Colombo. 
Despite the establishment of a one-stop shop at the SLTDA in 2010 to facilitate tourism projects, the investment approval time period remains excessively lengthy, where an investor would have to wait 244 days on average to receive the approval for a project. 

In addition, the approval process of tourism projects includes 12 line agencies, such as the UDA, Central Environmental Authority (CEA), Coast Conservation and Coastal Resources Management Department (CC and CRMD), in addition to 31 other state agencies, local authorities and Divisional Secretariats. 

The SLTDA data indicated that its one-stop shop was only able to successfully facilitate 326 tourism projects between September 2010 and June 2018, out of 604 processed projects, while 10 to 20 projects have been rejected. 

“When you see the number of approvals with various agencies, some investors run away,” said SLTDA Director General P.U. Ratnayake. 

He noted that the UDA was the first entity partner, which would be followed by the CEA, CC and CRMD and others.

Under the agreement with the SLTDA and UDA, the two agencies are expected to re-engineer the existing process of both agencies targeting investor convenience, enhanced efficiency and effectiveness under two phases: interim solutions with possible improvements and fully re-engineered automated process. 

He said that the IT departments of the SLTDA and UDA would commence working on setting up a common online platform to streamline the approval process.
He noted that once the approval process is fully streamlined according to the agreement, the average number of days required for the preliminary clearance would reduce from 59 days to 25 days, while the number of days required for the development permit process would reduce from 100 days to 30 days and the number of days required for certificate of conformity would reduce from 85 days to 30 days. 

Dr. Munasinghe emphasised that the UDA is leading the way in terms of efficiency, granting the approval for physical developments and noted that the UDA has fully automated its processes as the UDA only accepts online applications from May onwards.

The initiative was facilitated by the USAID’s Supporting Accelerated Investment in Sri Lanka project, which has been closely working with the SLTDA and UDA to support development of the agreement and the streamlining of overall investment process, in an effort to improve efficiency and reduce the time and costs for investors to obtain the approval for their projects. 

Sri Lanka set a target to increase the room capacity to 80,000, from 37,929 rooms as of 2017, nearly doubling the number of rooms, as the country expects to welcome 4.5 million tourists by 2020.

The SLTDA expects 5500 new rooms would come into the market this year, while around 3500 rooms have been added to the existing stock so far this year.