ECONOMYNEXT – The Sri Lankan government has adjusted its procurement cycles for development projects with the hope of utilizing the full Rs. 2,000 billion capital expenditure planned for next year, Cabinet Spokesman Nalinda Jayatissa said.

The island nation’s successive governments have failed to utilize the capital spending every year due to delays in approvals, tender process and procurements.

President Anura Kumara Dissanayake’s government has spent only less than 25 percent of the allocated Rs. 1,340 billion in the first nine months of the year, Finance Ministry officials have said.

“Spending 100 percent might not be possible in this year due to various technical reasons. In some places there were issues with tenders; in some places there were issues in the procurement process,” Jayatissa, also the minster of health and media, told reporters at the weekly Cabinet media briefing.

He said the government, however, has urged the ministries not to wait until January of next year to initiate these development projects.

“If you plan to start in January, you will only be able to actually get it underway around May,” he said.

“Now you know that funds will be allocated. The plans that respective ministries submitted to the Ministry of Finance knows about those plans. They have an idea of how much money will be spent. Accordingly, several steps including preparing plans, preparing estimates, and initiating procurement activities can be carried out even before the budget is passed.”

“(Ministries can) carry out the procurement activities, and wait until the budget is passed only to award the contract.”

“Once the budget is passed this time on December 14th, and after the Speaker signs it, generally within the month of December there is the ability to know the amount of money allocated to one’s ministry. Then, awarding can be made starting even from the first week of January, if needed.”

“It is that very process that we have granted approval for across all ministries. It is along with that that we expect to spend this 2,000 billion.”

Sri Lanka’s chronic failure to utilize its full budgetary allocations for capital investment reflects deep-rooted structural inefficiencies in public financial management and project execution, analysts and economists say.

They warn of lower economic growth in the future if the government fails to implement its planned capital investment projects.

The government has repeatedly said most of the spending occurs in the last quarter of the year.

Year after year, bureaucratic delays, protracted procurement disputes, politicized project selection, and a lack of technical expertise within line ministries leave a significant portion of capital expenditure unspent on the Treasury books.

This capital under-utilization carries severe long-term repercussions for the island’s economic trajectory.

By failing to deploy allocated funds into critical infrastructure such as transport networks, modernized power grids, and digital public systems, Sri Lanka suffers from lower productivity growth and worsening structural bottlenecks as well as a decline in overall gross domestic product (GDP) potential.

In a fragile post-default macroeconomic climate, this persistent shortfall also sends a negative signal to international development partners and private investors.

It demonstrates an institutional inability to absorb capital effectively, thereby stalling the very structural transformation required to safely out-grow a historic debt burden.

President Dissanayake last month promised to change the process to fast-track the spending. (Colombo/November 10/2026)

ECONOMYNEXT – Sri Lanka’s rupee closed at 332.33/40 to the US dollar spot on Tuesday, from 332.53/59 the previous day, while bond yields closed lower, dealers said.

A bond maturing on 15.09.2029 closed at 10.80/90 percent, down from 10.90/98 percent.

A bond maturing on 01.08.2030 closed at 11.00/03 percent, down from 11.07/12 percent.

A bond maturing on 01.12.2031 closed at 11.12/15 percent.

A bond maturing on 15.12.2032 closed at 11.50/55 percent, down from 11.65/70 percent.

A bond maturing on 15.10.2034 closed at 11.92/97 percent, down from 12.10/15 percent.

A bond maturing on 15.08.2036 closed at 12.15/20 percent, down from 12.40/50 percent. (Colombo/Nov10/2026)

ECONOMYNEXT — Sri Lanka’s cabinet has approved entering into an agreement with the Asian Development Bank (ADB) to obtain a 200 million US dollar loan to support micro, small, and medium-sized enterprises (MSMEs).

The facility will finance ‘Sub-program 1’ of the Sector Development Program, which focuses on building a robust and inclusive financial ecosystem for MSMEs.

The Department of External Resources has concluded formal loan negotiations with the ADB to acquire the funds.

The 200 million dollar loan will be drawn from the ADB’s ordinary capital resources and is divided into two equal tranches of 100 million US dollars each.

One tranche will serve as policy-based lending, while the other provides financial intermediation lending.

The financing falls under a broader framework approved on March 16, 2026, to conduct negotiations for up to 620 million US dollars across five sub-programs to support Sri Lanka’s reform agenda aligned with the International Monetary Fund’s (IMF) Extended Fund Facility.

Responding to questions from journalists on why Sri Lanka is securing 200 million dollars after seeking approval for 620 million dollars, cabinet spokesperson Nalinda Jayatissa clarified:

“Approval has been granted for the entire 620 [million]. Accordingly, depending on how negotiations progress and based on the case we present, the loan is disbursed,” Jayatissa said.

Jayatissa noted that discussions were held to secure the 200 million dollar loan under two distinct repayment frameworks.

The 100 million dollar policy-based component carries a 12-year repayment period with a three-year grace period.

The remaining 100 million dollar financial intermediation component has a 15-year repayment period alongside a five-year grace period. (Colombo/Nov10/2026)

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed sharply higher on Tuesday, CSE data showed, with the benchmark All Share Price Index moving up 2.75 percent.

The ASPI was up 592.02 points at 22,123.39, while the more liquid S&P SL20 was up 3.66 percent, or 224.97 points, at 6,368.12.

Easing global pressures and lower oil prices helped lift market sentiment, Raynal Wickremeratne, Head of Research and Strategy at NDB Securities, said.

“One of the things in the past that were dragging the market down was oil prices and also the negative sentiment globally. I think now some of that sentiment has recovered, you’re seeing oil also coming down, and effectively when you look at Sri Lanka, oil is one of the biggest factors here more than anything else,” Wickremeratne said.

He added that investors were also hopeful that shifts in power in the US House and Senate could lead to potential adjustments in US trade tariffs, providing relief to emerging markets with heavy US tariff burdens.

Positive contributors to the ASPI were Vallibel One (up 6.14 percent at 95.10 rupees), Dialog Axiata (up 4.88 percent at 49.40 rupees), Commercial Bank of Ceylon (up 4.28 percent at 225.25 rupees), Hayleys (up 4.02 percent at 239.25 rupees), and Hatton National Bank (up 3.81 percent at 415.00 rupees).

Softlogic Life Insurance (down 4.98 percent at 78.30 rupees), Softlogic Capital (down 4.17 percent at 11.50 rupees), Ambeon Holdings (down 3.28 percent at 35.40 rupees), LOLC Finance (down 1.96 percent at 5.00 rupees), and Ceylon Cold Stores (down 1.38 percent at 125.00 rupees) were top negative contributors.

Market turnover was 7.96 billion rupees. The banking sector led turnover with 2.03 billion rupees.

Several crossings were recorded during the session, led by Dialog Axiata (800 million rupees), Commercial Bank of Ceylon (309 million rupees), John Keells Holdings (93.7 million rupees), Swisstek (56.1 million rupees), Commercial Credit and Finance (52 million rupees), CAL Closed End Fund (50 million rupees), and Seylan Bank (50 million rupees and 39.2 million rupees).

Other notable crossings included DFCC Bank (41.2 million rupees), D Products (40.8 million rupees), Nations Trust Bank (28.2 million rupees), Ceylon Cold Stores (25 million rupees), CIC Holdings (21.5 million rupees), Hemas Holdings (21.4 million rupees), Sunshine Holdings (21.3 million rupees), Chevron Lubricants Lanka (21 million rupees), and Access Engineering (21 million rupees).

Dialog Axiata generated a combined 1.4 billion rupees of total turnover, driven by 800 million rupees in crossings and over 600 million rupees on the open market. (Colombo/Nov10/2026)

ECONOMYNEXT — Sri Lanka’s Cabinet has approved awarding a 1.73 billion rupee contract to M/s Sathuta Builders (Pvt) Ltd to construct a 10-storey building for the University of Kelaniya.

The new building will house the university’s Faculty of Commerce and Management Studies, reviving a project that was earlier halted due to the country’s economic crisis.

The approved contract sum excludes Value Added Tax (VAT).

The procurement began after the Cabinet granted approval on February 3, 2025, to resume the project through national competitive bidding, attracting a total of 10 bids.

“Following the evaluation of the bids, the contract is awarded to the lowest substantially responsive bidder based on recommendations from the procurement committees,” minister Nalinda Jayatissa said. (Colombo/Nov10/2026)

ECONOMYNEXT – Sri Lanka’s cabinet has approved a proposal to build a new railway bridge across the Mahaweli River between Sarasavi Uyana and Peradeniya, with financial assistance from an Indian credit scheme, minister Nalinda Jayatissa said.

The new bridge on the Matale railway line forms part of an initiative to develop an extensive suburban railway network covering the Kandy municipal area, where a feasibility study is currently underway.

Under the scope of the project, authorities plan to double-track the main railway line from Kadugannawa to Gampola via Peradeniya, and double-track the Matale line from Peradeniya to Katugastota.

Jayatissa noted that these measures are required to complete the planned double-tracking, eliminate bottlenecks caused by existing single-track sections, and improve the reliability and connectivity of the network.

“This project aims to restore and develop railway infrastructure damaged by Cyclone Ditwah and will enable the integration of the Matale railway line into the national railway network,” Jayatissa said.

Responding to questions from reporters on whether the new bridge would halt work on the historic “Black Bridge” (Kalu Paalama), Jayatissa said restoration on the older bridge will proceed in parallel.

“The restoration works will not be stopped,” Jayatissa said. “It is alongside that, that work is being undertaken regarding the construction of this bridge.”

Jayatissa explained that the single-track Black Bridge, originally built in 1865, suffered significant damage during the cyclone.

Due to its age and structural limitations, the Central Engineering Consultancy Bureau (CECB) is carrying out the repairs with technical assistance from the University of Peradeniya.  (Colombo/Nov10/2026)