• Only 41% of $ 12.54 b investments realised
• $ 110 m in potential investments lost
• 2,398 acres worth Rs. 9.78 b left idle

Sri Lanka has recorded a shortfall of nearly $ 7.4 billion in investment commitments made under 941 projects between 2015 and 2024, with only 41% of the expected investments materialising by the end of 2025, the latest Auditor General’s report on the Board of Investment (BOI) has revealed.

According to the report, agreements signed for new and expansion projects during the 10-year period involved expected investments of $ 12.54 billion, of which $ 5.15 billion had been realised by the end of last year.

The audit also found that 114 projects had realised less than 15% of their committed investments, prompting the Auditor General to recommend stronger monitoring and enforcement of investment agreements.

In its response, the BOI stated that investment commitments were generally realised over a period of two to three years, depending on the size and nature of the projects, and that the agreements concerned were at different stages of implementation.

The report further revealed that investments amounting to $ 109.95 million relating to 12 projects had been lost due to several shortcomings, including delays in obtaining regulatory approvals, land clearance issues, inadequate infrastructure, unsuitable project locations, and investors failing to proceed with proposed projects.

During 2025, the BOI received 167 investment applications and approved 117 projects with an estimated investment value of $ 1.89 billion, comprising $ 709.45 million in foreign investment and $ 1.18 billion in local investment. However, agreements had been executed for only 65 of the approved projects.

The Auditor General also identified considerable delays in the approval process, despite the BOI’s policy requiring project approvals and agreement execution to be completed within 60 days.

Delays ranging from 60 to 1,095 days had been observed in 83 projects since 2022, while agreements relating to 31 approved projects had remained pending for more than a year as of 31 December 2025.

The report noted that significant delays had occurred particularly in the energy, solar power, and mining sectors, involving approved and pending projects valued at over $ 1.8 billion.

The BOI attributed these delays mainly to the time taken by other State agencies to issue the necessary approvals and clearances.

In one instance, a proposed $ 37 million solar power project in Monaragala, initially recommended by the BOI’s Screening Committee in September 2023, was rejected after approximately two-and-a-half years when the Ministry of Energy confirmed in March this year that grid connectivity was unavailable.

The Auditor General observed that such delays reflected weaknesses in project evaluation and decision-making, with possible implications for investor confidence.

Meanwhile, the audit found that 2,398 acres of BOI-owned land valued at Rs. 9.78 billion had remained idle for more than 10 years.

These included lands within 17 BOI zones, particularly in Bingiriya Phase II, Sooriyawewa, and Mirijjawila/Hambantota, where inadequate electricity, water supply, and road infrastructure had prevented the properties from being utilised for investment projects.

The BOI stated that some of these lands could not be promoted for investment until the necessary external infrastructure was developed, including facilities requiring Treasury funding.

The report also revealed that approximately 533 acres allocated to seven projects whose agreements had been cancelled remained under occupation, although the BOI had initiated steps to recover the properties.

Separately, outstanding dues from BOI-approved enterprises, including annual fees, ground rent, and building rent, amounted to Rs. 1.76 billion as of the end of 2025, of which Rs. 461.37 million had remained unpaid for more than four years.

The Auditor General also observed that allowances amounting to Rs. 441.17 million had been paid without the necessary Treasury approval, while Rs. 134.55 million had been provided for bonus payments without formal approval of the proposed scheme.

Despite the shortcomings identified in the audit, the BOI recorded an operating surplus of Rs. 3.94 billion in 2025, compared with Rs. 3.54 billion in the previous year.

The Auditor General has recommended strengthening the monitoring of investment agreements, expediting approvals through better coordination with relevant agencies, and taking timely action to address underperforming projects.