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Serious concerns have emerged over the transparency of a multibillion-rupee vehicle procurement tender floated this week by the Ministry of Finance, Planning and Economic Development, with everal industry experts warning that the tender conditions appear to favour a predetermined bidder.

The Ministry on Thursday called for sealed bids to supply 1,775 brand-new, diesel-powered, automatic transmission double cabs through a national competitive bidding process. However, the Ministry has allowed just 12 days for submission of bids from October 23 to November 4, 2025 leaving potential suppliers scrambling to meet the tight deadline.

The unusually short window, coupled with the absence of a pre-bid meeting, has raised questions about whether the process was designed to restrict competition. Tender analysts note that such brief bidding periods for a project valued at over Rs. 40 billion are atypical for government procurements of this scale, where due diligence, documentation, and logistics arrangements generally require weeks of preparation.

The tender’s technical and eligibility requirements have also drawn scrutiny. To qualify, bidders must demonstrate a minimum annual turnover of Rs. 10 billion during 2017–2019—a period preceding Sri Lanka’s vehicle import ban. This clause, experts argue, automatically disqualifies several legitimate local and regional suppliers who were unable to maintain such volumes during that restricted import period.

Additionally, the requirement that bidders must operate at least ten service and repair centres under their own ownership, with five located outside the Western Province, further limits participation. The exclusion of franchise networks or authorized service associates a common practice in the auto industry appears designed to restrict eligibility to one or two dominant players with nationwide infrastructure.

Sources in the motor trade allege that the conditions collectively point to a tailor-made bid, potentially pre-arranged for a known supplier with existing facilities and financial scale. “This level of technical specificity within such a short timeframe is unrealistic unless a party was pre-informed,” a senior procurement consultant said.

Further examination of the bid document reveals other detrimental clauses, including a requirement that all vehicles must be delivered within 60 days of contract award, a condition nearly impossible under current import restrictions and shipping delays. The document also specifies that vehicles must be of a “globally recognized brand with manufacturer warranty certification,” but fails to provide clear parameters leaving room for subjective interpretation by evaluators.

The Finance Ministry has defended the procurement as part of its effort to strengthen field-level operations of ministries and departments, particularly in sectors such as agriculture, irrigation, and land management. However, the lack of transparency, industry consultations, and adequate preparation time has amplified calls for an independent audit of the tender process.

Given the scale, value, and urgency of this procurement, the controversy highlights a growing concern that public tenders in Sri Lanka are increasingly vulnerable to pre-determined outcomes, undermining fair competition and public trust in state contracting practices.

“Cabinet approval has been granted for the urgent purchase of a number of essential vehicles and machinery for state institutions, and the government has decided to first purchase a certain number of double cabs from the total vehicle requirement for the year 2025 It was not immediately clear why the tender was being closed at short notice.

Sri Lanka’s Commission to Investigate Allegations of Bribery or Corruption (CIABOC) has recorded its most active year in nearly a decade, marking a historic surge in arrests, convictions, and public engagement. The latest performance data shows a sharp rise in enforcement actions that began in 2024 and has carried into 2025, reflecting the growing impact of the Anti-Corruption Act, No. 9 of 2023.

CIABOC’s intensified campaign has shifted beyond traditional bribery cases to tackle large-scale corruption and misconduct involving high-ranking public officials and political figures. The Commission said its mission now prioritises robust law enforcement, prevention, and transparency to strengthen governance and public accountability.

In 2024, CIABOC conducted 53 successful raids  the highest in years  compared to 43 in 2023 and 32 in 2022. These operations led to 86 arrests, up from 57 the previous year. The momentum remains strong in 2025, with 27 raids and 34 arrests in just the first six months.

While bribery remains central to CIABOC’s operations, the agency has widened its reach into more complex corruption cases. In 2024, the Commission filed 83 cases, 70 of which were bribery-related. During the first half of 2025, 15 of the 50 filed cases were corruption-related — nearly matching the highest annual record of such cases in 2022. For the first time, cases involving illicit enrichment and non-declaration of assets have begun to emerge under the new legal framework.

A notable trend has been the prosecution of senior officials and political leaders. Among those arrested in the first half of 2025 were a former Minister of Health and Mass Media, a former Minister of Sports, a former Chief Minister and Chief Secretary of the Uva Province, and a former Opposition Leader of the Central Provincial Council. High-profile arrests also included senior officers from the Department of Motor Traffic, SriLankan Airlines, and even a neurosurgeon.

Convictions have similarly climbed to their highest level since 2015. Thirty individuals were convicted in 2024 including a former Minister of Disaster Management and senior Customs and Railway officials while 24 convictions were recorded in the first half of 2025. Those convicted this year include a former Chief Minister, a former Minister of Sports, and a former MP who also chaired Lanka Sathosa.

CIABOC attributes this momentum to greater public engagement following the 2023 Act. A record 4,267 complaints were lodged in 2024, with another 3,022 received in the first half of 2025. Meanwhile, the Prevention Division has conducted 139 awareness programmes in 2024 and 113 this year, targeting public institutions, private firms, and schools.

The Commission is also supporting the creation of Internal Affairs Units within ministries and State bodies to enhance internal oversight and curb corruption from within.

In a major policy shift, the new government has issued a Gazette notification enabling the release of nearly 1,000 vehicles held by Sri Lanka Customs, marking a significant development in the ongoing controversy over vehicle import irregularities. The Gazette, signed by President Anura Kumara Dissanayake in his capacity as Minister of Finance, Planning and Economic Development, came into effect on October 24.

The decision provides a regulatory framework for releasing vehicles imported under Cross Border Letters of Credit (LCs)—a practice that has long been under scrutiny due to widespread allegations of fraud and manipulation. Despite vehicle imports being permitted since February this year, a large consignment of vehicles brought through the Hambantota Port had been withheld by Customs for months over suspected violations of the 2013 Import-Export Regulations.

According to the Gazette, vehicles imported under cross-border LCs opened in third countries, rather than in the country of origin, may now be released under specific conditions. These include full verification of import documentation, Customs clearance upon payment of all applicable duties and penalties, and compliance with registration and emission standards prior to release.

The decision comes amid increasing pressure on the government to address irregularities in vehicle imports that have cost the Treasury billions of rupees in lost revenue. Investigations over the past two years have revealed that several importers exploited loopholes in banking and documentation systems by routing LCs through intermediary countries to evade taxes, undervalue vehicles, or disguise country-of-origin details.

Customs officials and industry experts warn that such schemes not only distort market prices but also undermine legitimate importers and financial institutions. In several cases, vehicles were imported using forged invoices or mismatched engine numbers, raising concerns about money laundering and the entry of stolen or illegally modified vehicles into the domestic market.

The government’s latest move is expected to generate mixed reactions. While vehicle importers welcome the release as a relief after prolonged delays, consumer rights groups have urged authorities to ensure transparency and accountability in implementing the Gazette. Economists argue that the decision reflects the administration’s attempt to balance economic recovery with enforcement integrity—allowing revenue generation from Customs duties while preventing market stagnation.

As Sri Lanka continues its efforts to stabilize the economy, the vehicle import sector remains a critical test of regulatory discipline and governance credibility. The Finance Ministry has indicated that a more comprehensive import control and verification mechanism will soon be introduced to prevent similar abuses in the future.

Sri Lanka’s long-promised leap into electric mobility has hit a legal speed bump as the Court of Appeal this week ordered Sri Lanka Customs to expedite its investigation into the controversial detention of BYD electric vehicles imported by John Keells CG Auto Ltd. (JKCG), a joint venture between Sri Lanka’s blue-chip conglomerate John Keells Holdings PLC and Nepal’s Chaudhary Group (CG Corp Global).

During Thursday’s hearing, Court of Appeal President Justice Rohantha Abeysuriya stressed that while Customs plays a crucial role in revenue collection, the interests of consumers and importers must also be safeguarded. The court directed Customs to swiftly conclude its probe into the vehicles’ engine (motor) capacity and urged all parties to cooperate.

The dispute erupted after Sri Lanka Customs detained several shipments of BYD electric vehicles, alleging that their motor power had been under-declared to reduce import duties. John Keells CG Auto filed a writ petition seeking the release of around 1,000 vehicles held at the port. In August 2025, the court allowed conditional release upon submission of a bank guarantee of about Rs. 3.6 billion and cooperation with an independent technical committee.

Additional Solicitor General Sumathi Dharmawardena, appearing for Customs, informed the court that the vehicles could be released under a company bond, while a detailed report on the scanning equipment used for inspection would be presented next week. However, President’s Counsel Farzana Jameel, representing JKCG, argued that the detention was unlawful. The court will revisit the case on October 28 to consider possible settlement terms.

Meanwhile, John Keells CG Auto issued a public statement clarifying that none of the recalled BYD Tang or Yuan Pro models had been sold in Sri Lanka. The recall, announced by BYD in China, affected vehicles manufactured between 2015 and 2022, but not those imported locally. JKCG emphasized that all BYD units sold in Sri Lanka carry full manufacturer warranties and after-sales support from trained technicians.

The case has drawn attention to Sri Lanka’s fragile regulatory environment for electric vehicles. The BYD venture, launched in 2024 as a major green initiative, was expected to revolutionize the country’s EV market with showrooms in Colombo, Kurunegala, Ratnapura, and Ampara. Yet, the customs controversy has stalled deliveries and cast a shadow over the project.

The controversy also echoes past regulatory challenges faced by CG Motors in Nepal, where the company was accused of tax manipulation in 2023. Combined with Chaudhary Group’s acquisition of Union Bank of Colombo through offshore channels, questions have surfaced about governance and transparency.

As Sri Lanka pushes toward sustainable transport, the BYD case underscores a broader issue — balancing investor confidence, regulatory scrutiny, and public accountability in the country’s emerging EV landscape.

The government’s decision to dismantle the Information and Communication Technology Agency (ICTA)  once hailed as the engine of Sri Lanka’s digital transformation  and replace it with a new entity called GovTech Ltd. has stirred deep concern within the ICT community and policy circles. While the Ministry of Digital Economy claims the restructuring will modernize and streamline digital governance, the move also raises questions about continuity, accountability, and the protection of two decades of institutional knowledge built under ICTA.

Established in 2003 with World Bank assistance, ICTA was instrumental in transforming Sri Lanka’s public sector through technology. It spearheaded initiatives such as e-Sri Lanka, Lanka Government Network (LGN), GovSMS, and the open data portal, connecting government institutions and citizens through digital platforms. It also promoted rural ICT access through telecentres and supported numerous private sector and start-up initiatives, positioning Sri Lanka as a regional digital innovator.

However, the recent Cabinet decision to wind up ICTA signals a shift in the government’s digital governance strategy. Acting Secretary Waruna Sri Dhanapala confirmed that GovTech Ltd. has been incorporated as a legal entity with Dr. Hans Wijayasuriya appointed as Chairman and a Board of Directors already in place. The 2026 Budget has allocated funds for its operations, supplemented by Asian Development Bank (ADB) and World Bank support.

Yet, GovTech’s operational readiness remains in question. The Ministry admits the agency lacks both a defined organizational structure and a qualified workforce. A consultancy firm is now being hired to design its framework a process expected to take up to six months. Until then, ICTA continues to function in a transitional capacity.

Officials insist GovTech will eventually absorb ICTA’s projects, but the liquidation process, already initiated by the Treasury, risks creating administrative and financial bottlenecks. ICT professionals warn that ongoing digital initiatives  such as cybersecurity frameworks, national identity systems, and e-service portals could face serious disruptions.

Observers also question the government’s decision to dissolve ICTA at a time when digital governance is crucial for public service efficiency and investment promotion. The agency’s dissolution, critics argue, appears more politically driven than strategically planned, especially given ICTA’s proven record of delivering technology-based public solutions with international collaboration.

As GovTech prepares to take charge of Sri Lanka’s digital future, the key question remains: can a newly-formed entity replicate the institutional expertise and credibility ICTA earned over two decades or will the nation’s e-governance vision risk being rebooted from scratch?

Following the entry of new international fuel operators, the Ceylon Petroleum Corporation (CPC) experienced a significant financial setback in 2024 due to a reduction in its market share. According to a report issued by the Ministry of Finance, Economic Stabilization and National Policies, the corporation’s revenue has dropped by 26.9%.

In 2023, the CPC recorded a revenue of Rs. 1,263.6 billion. However, in 2024, this revenue fell by 26.9% to Rs. 923.4 billion, the report states.

The sales volume in 2023 was 4,184 million liters of fuel. In 2024, this figure dropped by 286 million liters. The corporation's gross profit also declined by 53.4%, down to Rs. 75.6 billion in the past year.

However, due to the continuous application of the cost-reflective pricing formula and the relative strengthening of the Sri Lankan Rupee during the year, the corporation still managed to record a net profit of Rs. 33.3 billion.

Sri Lanka recorded a notable decline in marriages in 2024, according to the latest data from the Department of Census and Statistics.

A total of 139,290 marriages were registered in 2024, marking an 8 percent decrease from 2023, the data showed.

In 2022, the year of the economic crisis, 171,140 marriages were registered across the country.

Earlier, official data showed a sharp fall in births. According to the statistical agency, 220,761 births were recorded in 2024, compared to 301,706 in 2020.

(Source - Xinhua)

Sri Lanka’s contentious e-visa system has come under renewed scrutiny as the Department of Immigration and Emigration’s special audit report was officially presented to Members of Parliament this week. The report, compiled by Acting Auditor General G.H.D. Dharmapala, reveals serious lapses in financial accountability, legal compliance, and procurement transparency surrounding the multimillion-dollar e-visa contract awarded to a foreign private company.

Speaking in Parliament, Committee on Public Finance (CoPF) Chairman Dr. Harsha de Silva confirmed that MPs had received the special audit report, which includes nine key recommendations to rectify the issues and restore public trust in the visa issuance process. He urged that the recommendations be implemented without delay, noting that the controversy has severely tarnished the image of the country’s border control system.

The Auditor General’s report calls for a comprehensive review of the outsourcing arrangements, urging authorities to determine their legality under the Immigration and Emigration Act of 1948. It also recommends investigations into officials who approved and implemented the project without the involvement of the Finance Ministry or Treasury oversight, particularly in relation to visa revenue being collected in foreign bank accounts.

The report highlights the absence of competitive bidding, weak contractual safeguards, and a lack of cost-effectiveness studies before awarding the contract. It calls for immediate recovery of any losses incurred by the government and insists that future service providers must be selected through a transparent, competitive tender process once ongoing court proceedings are concluded.

The e-visa system, introduced in late 2023, was intended to streamline Sri Lanka’s entry procedures for tourists and business travelers through online processing. However, the project quickly became mired in controversy after revelations that visa fees were being charged in U.S. dollars and collected through a private entity’s overseas account without full government supervision. Public backlash led the authorities to suspend the system temporarily earlier this year, reverting to the previous visa-on-arrival and ETA platforms while investigations continued.

The Auditor General’s findings have revived the debate over digital governance and public-private partnerships in critical state functions. The report stresses that all future contracts must comply with Sri Lankan tax regulations, ensure data protection, and guarantee that all revenue is properly remitted to the state.

While the audit was limited to available evidence, it recommends referring potential unlawful acts to specialized investigative agencies. The controversy, which has already led to several administrative transfers within the Immigration Department, is expected to shape the government’s broader approach to e-governance reforms in the coming months.

Margin loans issued by Sri Lanka’s banking sector have surged by nearly 25 percent—from Rs. 48 billion in January to Rs. 60 billion by August 2025 raising fresh concerns about growing speculative exposure in the financial system. The Central Bank’s latest Financial Stability Review confirms this increase, even as authorities attempt to balance post-crisis recovery with financial discipline.

According to B.H.P.K. Thilakaweera, Director of the Central Bank’s Macroprudential Surveillance Department, the sharp rise in margin lending reflects both investor optimism and increasing credit appetite amid a rebounding economy. Although Central Bank Governor Dr. Nandalal Weerasinghe downplayed the risk stating that margin credit remains a small share of total banking sector lending—analysts warn that the pace of growth could signal emerging vulnerabilities.

Margin loans, which allow investors to borrow against their equity portfolios to buy more shares, have historically amplified market cycles in frontier economies. With the Colombo Stock Exchange (CSE) rallying on the back of improved earnings, falling inflation, and restored investor confidence, the risk of over-leverage has increased. The Central Bank report notes that stock market volatility, measured by the 20-day moving standard deviation, has already exceeded 2024 averages, peaking in January 2025 the highest level since April 2022.

Such volatility, coupled with a sharp increase in leveraged positions, could expose both investors and banks to severe losses if markets correct sharply. The Review also highlights elevated geopolitical tensions ranging from global trade disputes to armed conflicts that have further intensified risk levels.

Economists caution that a sustained rise in margin lending without commensurate oversight could threaten broader financial stability. While corporate earnings and improved liquidity have driven a bullish sentiment, the same optimism may lead to speculative excesses if not closely monitored.

For depositors, the concern lies in potential contagion. If stock market corrections trigger defaults on margin loans, banks could face balance sheet pressures, particularly smaller ones with limited capital buffers. This, in turn, may weaken depositor confidence especially in a country with a history of monetary instability and periodic financial shocks.

The Central Bank faces a delicate policy challenge: supporting capital market growth while preventing excessive risk-taking. Experts suggest tightening margin lending guidelines, imposing higher risk weights on equity-backed loans, and enhancing transparency on exposure levels across financial institutions.

Sri Lanka’s experience underscores the fine line between economic recovery and speculative overheating. As the nation rebuilds confidence after years of instability, maintaining macroprudential discipline will be key to avoiding another cycle of financial distress.

Japan is quietly strengthening its economic footprint in Sri Lanka as both countries explore a deeper industrial partnership aimed at turning the island into a strategic supply base for Japanese manufacturing operations in India and the wider South Asian region.

The Board of Investment (BOI) is currently collaborating with the Japan External Trade Organization (JETRO) to attract new Japanese investors and create a specialized Japan–Sri Lanka Investment Zone. According to BOI Chairman Arjuna Herath, discussions are also underway on developing an India–Sri Lanka Economic Corridor to integrate regional value chains.

Japan’s renewed interest comes amid a global shift in supply chains. Many Japanese manufacturers, heavily invested in India, are now exploring Sri Lanka as a cost-effective alternative for sourcing intermediate goods, logistics, and light manufacturing. “They are considering whether Sri Lanka can act as a supply source to support their Indian operations,” Herath said, noting that several Japanese firms have initiated feasibility assessments within BOI zones.

At present, nearly 85 Japanese companies operate under the BOI framework in Sri Lanka, primarily engaged in automotive components, tire manufacturing, electronics, precision engineering, and construction material production. These firms collectively account for around 12% of annual FDI inflows from Asia, contributing an estimated US$ 120–150 million per year in direct investments and reinvested earnings.

Prominent Japanese investments include Michelin Lanka Pvt Ltd, which expanded its Sri Lankan operations with an additional US$ 72 million from its parent company, and CEAT OHT Lanka Pvt Ltd, a joint venture with a Japanese partner, which committed US$ 111 million to a state-of-the-art tire manufacturing plant. Other notable Japanese-linked ventures operate in renewable energy, industrial automation, and high-tech logistics services.

The BOI has recorded a marked resurgence in foreign investment confidence. Between January and September 2025, it approved 104 projects with total capital investment of US$ 1.06 billion, split almost equally between foreign (US$ 540 million) and local (US$ 520 million) participation.

The breakdown of realized FDI shows equity inflows of US$ 133 million, reinvested profits of US$ 132 million, and intra-company loans of US$ 231 million. Long-term foreign commercial loans amounted to US$ 331 million, bringing total realized investment up 138% compared to 2024.

The Colombo West International Terminal (CWIT) was the single largest investment during the period, injecting US$ 229 million, followed by CEAT OHT’s US$ 111 million and Bluehaven Services’ US$ 85 million for the City of Dreams resort development.

BOI expects total foreign direct investments including new projects, reinvestments, and borrowings to reach US$ 1.1 billion in 2025, driven largely by renewed investor confidence, policy reforms, and improved credit ratings.

Herath emphasized that “the strong participation of existing enterprises reflects the trust built through economic and political stability, transparency, and good governance.”

With JETRO’s involvement and growing Japanese investor interest, Sri Lanka’s next growth frontier may hinge on how quickly it positions itself as a dependable link in Japan’s regional manufacturing and supply chain ecosystem.