Sri Lanka’s annual loss due to government tender corruption amounts to 1% of Gross Domestic Product: Verité Research

The annual loss to Sri Lanka due to corruption in government tender procurements is estimated to be at around 1 percent of the country’s GDP, according to Verité Research.

Based on a 20 percent cost escalation of Sri Lanka’s procurement expenditure, the think tank said the loss amounts to approximately Rs. 300 billion if the 2023 expenditure figures are considered. 

To support the estimation, Verité Research shared that out of 34 public authorities assessed by the think tank in 2024, only 5 published complete and up-to-date tender notices while only 2 disclosed full information about the winners of the tenders.

Moreover, less than 35 percent of tenders have been published online by public authorities, according to the think tank.

“The Ministry of Ports, Shipping, and Aviation is the only public authority that published complete and up-to-date tender notices and winners in 2024,” the organisation further said.

As per regulation 20 of the Right to Information Act No. 12 of 2016, these authorities are mandated to proactively disclose this information at least in a digital format without waiting for a request.

Overall, the think tank rated the performance of these organisations disclosing information at 9 percent which it deemed was an “unsatisfactory level”

“Procurement in Sri Lanka has a history of corruption. The lack of proactive disclosure of information on tenders prevents the public from scrutinising them and challenging their shortcomings. As tenders are a major component of the government procurement process, it leaves room for corruption,” Verité Research stated.

The think tank’s 20 percent cost escalation for Sri Lanka was based on a guidebook on public finances from the United Nations Office on Drugs and Crime which indicates that the amount lost on public contracts due to corruption can range between 10-25 percent of a contract’s value on average. 

(NR)