Successive Sri Lanka governments have implemented 179 projects during the past 33 years with Asian Development Bank funding and Public Sector Participation in key sectors of the economy, ADB Country Partnership report revealed.
However, the potentials of PPPs are not utilized to their fullest because of many obstacles.
These include the absence of an updated and robust PPP framework, full-fledged laws, policies, and institutional mechanisms, and a total lack of public sector expertise to manage such projects.
To address some of these gaps, the previous government set up the National Agency for PPP (NAPPP) and proposed plans for new PPP legislation. The ADB stressed the current government should ensure that there will be transparency in managing contingent liabilities arising from PPPs.
From 1990 to 2023, Sri Lanka implemented 179 PPP projects valued at over USD 5.3 billion, according to the “Public-Private Partnership Monitor Sri Lanka Report” from ADB.
Of this, 162 involved the power sector and five concerned port development. This is evidenced by how much better PPPs have run the ports-the terminals developed under PPP arrangements currently handle about 70 percent of the country’s port traffic.
Besides, 25 percent of Sri Lanka’s electricity is provided by different PPP projects. This report enumerates that most such projects in the country are operational while only three were cancelled.
But all is not well. Some projects within the Provincial Councils were abandoned at midway thus causing massive losses on financial account.
For instance, the National Audit Office recently reported that 32 ADB-supported water supply and allied projects initiated in 2020 had been abandoned by August 2022 due to various reasons such as poor infrastructure, inaccessible roads, non-compliance with approved plans, and improper feasibility studies.
This abandonment of projects midway has resulted in losses amounting to Rs. 3.81 billion .Besides, those projects on water tanks and water purification systems were also unsuccessful due to inappropriate ground conditions or potential lack of capacity.
The report further reveals that infrastructure such as marketplaces, veterinary centers, buildings for Samurdhi projects, and community centers were initiated without any public demand.
Some of these projects were started without conducting feasibility studies. Additionally, the audit uncovered that a significant number of water tanks initiated with the approval of Provincial Councils were constructed without considering ground-level conditions.
It was also found that approximately 25 water projects out of 32 were abandoned midway due to the inadequacy of capacity in water purification systems.
A common characteristic observed in every abandoned project is the lack of proper planning, as highlighted in the audit report.
