Sri Lanka to fast track payments to contractors, amend procurement rules

ECONOMYNEXT- Sri Lanka will fast-track outstanding payments to suppliers and revise procurement rules, the Prime Minister Ranil Wickremesinghe said following industry lobbying.

“This has become an issue," Wickremesinghe told contractors sector after opening a construction sector exhibition.

"I have said to identify the agencies where payment is really behind time. Then then we will work on it,”

He said some government agencies are not paying the oldest debtor first. Some contractors get paid first if they have political favour, he said.

Prime Minister Wickremesinghe was speaking at the Construction Exhibition 2018 organised by the National Construction Association of Sri Lanka.

Wickremesinghe said the government is trying to find funds to repay debtors.

“We’re trying to find the money simply not because we love you, but because once we give you the money, you go and pay the others and it goes down to the village,” he said.

Procurement guidelines will be amended as well, Wickremesinghe said.

“Since I first entered government, it has become more and more complicated,” he said.

“With the restrictions on procurement, we would have built Mahaweli in 100 years, not the 10 years that took us,” he said.





The planned 30-year development of the Mahaweli basin was accelerated and spearheaded by the late Minister Gamini Dissanayake.

However most the contracts, which were funded by Western governments and donor agencies, followed procurement guidelines of the respective government and donor agencies as well.

The current government is following a strategy of public-private partnerships (PPPs), due to the limited fiscal space. Sri Lanka will be in the peak of a foreign debt repayment cycle over the next 4 years.

The head of the newly created National Agency for Public Private Partnerships, has also complained of the restrictions the current government procurement guidelines place on the creation of PPPs.

Wickremesinghe on Friday said that the government will be looking for PPPs for many construction projects going forward.

“We’re now looking at self-funded projects where you bring in the money and we will repay the contractor for a given set of projects,” he said.

“Which means you will not only be a contractor but also put together financial packages to becoming a part of the construction industry.”

The Prime Minister placed the blame on restricted procurement processes on the bureaucracy.

“There are problems in the system of procurement. The procurement rules are prepared by your colleagues in government, not by us (politicians).”

Despite the rigidity in procurement, there have been numerous reports of instances where the process was ignored. (COLOMBO, 27 August, 2018)

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