The capacity of a highway facility is defined as the maximum hourly flow rate at which persons or vehicles can reasonably be expected to traverse a point or uniform section of a lane or a roadway during a given time period under prevailing roadway and traffic conditions (HCM, 2010) (Transport Research Board 2010). Even though the definition of capacity is universal capacity is a value dependent upon various traffic and roadway characteristics. Hence different countries have developed indigenous guidelines to estimate the traffic carrying capacity of their roads. This study is a steppingstone to the development of such a guideline for Sri Lanka. The study looks into the applicability of the HCM 2010 guideline for local conditions and observes the empirical evidence. It is found that the HCM guideline is not applicable to local conditions given the low traffic stream speeds. Further, capacity values of 25 four-lane highway sections are estimated using first principles assuming Greenshields’ model. Capacity values ranging from 2399 pcu/h/l to 1346 pcu/h/l were observed. Even though they are comparable with capacity values observed in homogeneous traffic streams in developed countries the speeds at capacity were found to be drastically low.