News
CPC leads the way in highest failure rate and highest percentage of cancelled procurements
View(s):By Namini Wijedasa
The Ministry of Finance has published detailed statistics about high-value procurements of over Rs. 200mn for 2022-24, showing that the Ceylon Petroleum Corporation (CPC) recorded the highest failure rate and the highest percentage of cancelled procurements across the monitored entities during the period.
The statistics were released on the website of the Ministry’s Public Finance Department in keeping with a government commitment under the International Monetary Fund’s (IMF) Governance Action Plan (GAP). The exercise serves as an accountability measure, evaluating the transparency and outcomes of major procurement activities.
The three-year data also shows that the CPC has the largest number of procurements over Rs. 200mn. Of the total 388 tenders, 75 are listed as having failed, while a massive 162 are marked as having been cancelled. This is 19 percent and 42 percent, respectively. Accordingly, a majority of high-value procurements during the period (61 percent, combined) did not result in a successful award.
Notably, however, the highest number of cancelled and failed CPC procurements—numbering 61 and 135, respectively—was recorded in 2022, when Sri Lanka’s economic crisis peaked. The total dropped to just two last year. The data does not give reasons. Neither does it define what a “failure” rate is in comparison to a “cancelled” rate.
Nine additional institutions have been monitored, comprising ministries and state-owned enterprises. They are Lanka Coal Ltd; Ministry of Agriculture, Livestock, Land and Irrigation (the agriculture and irrigation sectors are taken as separate entities); Ministry of Education, Higher Education and Vocational Education; and the Ministry of Transport, Highways, Ports and Civil Aviation (including the Sri Lanka Ports Authority).
The others are SriLankan Airlines Ltd; Ministry of Urban Development, Construction and Housing (the water sector is taken as a separate entity); and the Ministry of Health and Mass Media (only the health sector).
The Health Ministry had the next largest number of high-value procurements, at 208. It shows a 53 percent success rate, while 36 per cent failed. Unlike with CPC, the number of cancellations peaked in 2023.
The water sector of the Urban Development, Construction and Housing Ministry had the third highest number of high-value procurements and reported a high cancellation rate of 77 percent, with 129 out of 168 procurements being cancelled. All of them occurred in 2022, with zero reported in the subsequent two years. Overall, there were just 39 successful procurements, with 29 of them taking place in 2022.
The top three entities that reported the best success rates for its high-value procurements were the Ministry of Transports, Highways, Ports and Civil Aviation at 93 percent (26 successful procurements out of 28); SriLankan Airlines Ltd at 80 percent (69 successful procurements out of 86); and the Ministry of Agriculture, Livestock, Land and Irrigation (agriculture sector) at 79 percent (11 successful procurements out of 14).
Of all the entities, the Ministry of Education, Higher Education and Vocational tradining has the least information. It has just one procurement listed as failed and one procurement marked as cancelled. There are details about successful, negotiated or re-tendered high-value procurements over Rs. 200mn.
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