National Audit raises red flags over costly e-procurement delays
Sri Lanka’s long-promised shift to electronic government procurement, a reform positioned at the heart of public financial management modernisation, stands at critical crossroads.
While officials describe the e-Government Procurement (e-GP) project as being in an “advanced stage of implementation,” Auditor General’s Department findings and implementation data reveal significant bottlenecks that continue to delay its full realisation.
The government has mandated that from 1 July 2026, all central government ministries, departments, and agencies must rely exclusively on purchase orders generated through the Integrated Treasury Management Information System (ITMIS).
The Treasury has made its position unambiguous: claims arising from procurement outside ITMIS will not be settled. A senior Finance Ministry official noted that this is intended to “enforce discipline, transparency, and a single digital trail across public spending”.
The policy thrust is backed by substantial fiscal commitments. The 2026 Budget allocates a sizable share of the Rs. 30 billion digitalisation envelope to expanding electronic procurement and payment systems.
Supported by the World Bank under the Public Financial Management Strengthening Project, and complemented by initiatives such as the Unique Digital Identity program, e-GP is presented as a cornerstone of governance reform.
However the Auditor General’s Department, in its latest report, paints a more sobering picture.
Although a preliminary agreement to develop the e-GP system was signed as far back as November 25, 2019, system development up to March 31, 2025 had been limited largely to procurement through the “shopping method”.
Planned capabilities for handling national and international competitive bidding were still incomplete, well beyond original timelines.
More concerning is the contractual performance. The initial agreement with Theekshana Institute, valued at Rs. 71.5 million, failed to deliver adequate results even by December 2021.
An addendum signed in March 2023, raising the contract value to Rs. 152.87 million and extending the delivery period by 20 months, also fell short.
By June 30, 2025, 27 months under the revised agreement, auditors observed that expected outcomes had still not been achieved.
“The transition to electronic procurement, which should have delivered higher efficiency and measurable savings, has now been delayed by more than six years,” the Auditor General’s report states, highlighting gaps in institutional readiness and system performance.
International partners have also taken note. IMF-linked sources emphasise that effective e-procurement is “not a technical luxury but a fiscal necessity”, particularly for countries seeking to strengthen expenditure controls and credibility.
They warn that delays undermine confidence in reform commitments and weaken anti-corruption safeguards.
Meanwhile, pilot initiatives such as the e-Procurement Monitoring System-supported by UNDP and the Government of Japan-along with other various training programmes, demonstrate progress.
Currently, procurement notices and awarded contracts are available online through the PROMISe.lk (Procurement Management Information System) portal.
What lies ahead is a challenge: to convert policy intent, budgetary support, and donor backing into a fully functional, trusted e-procurement ecosystem-before the end 2026 changes from promise
into pressure.
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