Sri Lanka’s first cable car project worth $ 62 million is stalled due to a refusal by the Forest Department to grant permission to release 150 perches on Kikiliyamana Mountain for the construction of a compulsory safety stop and sanitation facilities, a Parliament report said.

According to a report by the Select Committee of Parliament to study the practical problems and difficulties in relation to preparation for the proposed Business Ready (B-READY) Index in Sri Lanka, the proposed cable car project from Nanu Oya to Nuwara Eliya is delayed due to a regulatory dilemma at the Forest Department.

The report said that the refusal by a Forest Department official to grant permission to release 150 perches on Kikiliyamana Mountain for construction of a compulsory safety stop and sanitation facilities had delayed the project and that the refusal occurred despite the project receiving necessary approvals, including two Cabinet papers presented in 2018 and 2021.

“The official cited the area as a highly sensitive zone, leading to a regulatory dilemma,” the report said.

The cable car project, to construct a four-kilometre long cable car line from Nanu Oya to Nuwara Eliya, was initiated in December 2021 and facilitated by the Sri Lanka Tourism Development Authority (SLTDA) on a Build, Own, Operate, and Transfer (BOOT) model, with a 30-year leasehold land allotment in Nuwara Eliya with a capital investment of $ 62.15 million.

The report said that the land acquisition impediments had not been resolved even by the end of 2023, while similar projects initiated later in Thailand and Nepal by the same company are already operational.

The Select Committee said that despite the company’s strong commitment, environmental consciousness and willingness to replant extensively for the damaged plantation and modify its plans, it encountered a regulatory deadlock; the lack of initial approval prevented the firm from accessing the area to conduct the environmental impact assessment (EIA), resulting in an impasse.

“This incident demonstrates the many failures in the process of acquiring land for businesses in Sri Lanka. The committee recommends the establishment of a common goal and policy for all government agencies regarding investment and enterprise enablement,” the report said.

The committee also recommends all institutions provide clearances to investments to maintain KPIs on the total investment applications, value received and approved, and investment lost due to delays or refusals to approve.

It is recommended that these results are annually evaluated and analysed through an independent think tank. A joint approvals application process must be established to prevent regulatory deadlocks as encountered during this project.