Govt. moves ahead with landmark Public Private Partnership Law
Sri Lanka’s Public Private Partnership (PPP) Act will soon be introduced by the government with the enabling bill having been prepared by the Finance Ministry.
The law has been framed to give a holistic legal and institutional base for PPP projects in Sri Lanka and create a dedicated National Agency for Public Private Partnerships to promote, facilitate, and oversee PPP projects.
The move follows an effort by the government to advance private investment into public sectors and infrastructure in times of fiscal strain.
The Act is designed to bring in consistency, transparency, and accountability to the PPP process to address inherent flaws in project selection and implementation, a senior Finance Ministry official said.
The draft PPP Act will:
- Provide a uniform legal framework for regulating PPP contracts in Sri Lanka.
- Substitute existing project identification, appraisal and implementation processes.
- Provide for full value for money and feasibility appraisals to be done before entering into the PPP model.
- Meet the Public Finance Management Act, No. 44 of 2024, as well as national-level procurement procedures.
- Encourage sustainability, long-term prudence in finances, and transparency of decision-making.
One of the key provisions in the Act is the creation of a National Agency with a mandate to handle the whole PPP project life cycle from screening, preparation, procurement through handling and monitoring the contracts roles hitherto contentious with duplication mandates among over one agency
The draft bill also places importance on capacity-building, with systematic skills development and training of public officials on negotiating and handling intricate PPP contracts. Analysts point out this is crucial considering previous setbacks in which the state was short on expertise, which exposed projects to undesirable terms or poor management. The government regards the new Act as a corrective and strategic policy tool. The addition of a principle-based approach will assist in eliminating poorly thought out, politically motivated projects that have hitherto diverted public funds.
At the same time, the assurance offered by a sound legal framework could attract foreign and domestic investors, signalling increased policy stability at a key point in Sri Lanka’s economic reawakening.
But there are others who are still cautious. Some critics suggest that the success of the Act will be determined by how autonomous the National Agency can be and whether procurement processes will remain free from political interference. “The framework is sound, but implementation will be the real test,” said one policy analyst.
The Finance Ministry says the PPP Act, once in place, will help deliver much-needed services and infrastructure while ensuring value for money and budget discipline. For a country grappling with the need to balance urgent development needs against the availability of limited state resources, the Act can potentially be a growth pillar of the future.
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