Sri Lanka’s Vehicular Emission Test Trust Fund (VETTF), a key initiative in curbing vehicle-related pollution, faces an uncertain future following sweeping fiscal reforms introduced under the Public Financial Management Act No. 44 of 2024.
The new legislation mandates the dissolution of all independently managed public funds and their integration into the central Treasury. As a result, the VETTF—established in 2008 to support vehicle emission regulation—is now required to transfer its financial assets to the Treasury by August 25, raising concerns over the continuity and autonomy of critical environmental efforts.
According to a senior Treasury official, the change is not aimed at abolishing the fund but is a “statutory requirement” to ensure greater transparency and centralized fiscal oversight. “Departments can no longer manage independent funds. Everything must now go through the Treasury,” he explained.
The Motor Traffic Department (MTD), which oversees the fund, confirmed the directive was communicated through an official circular. A senior MTD source, speaking on condition of anonymity, acknowledged the fund was deemed non-statutory under the new regulations, necessitating its dissolution.
The VETTF is financed through a 10 percent levy on vehicle emission tests, with the remaining 90 percent allocated to private testing companies. Though official figures are not disclosed, revenue from the program is estimated at Rs. 1.5–2 billion annually, based on test volumes and vehicle registrations.
Since its inception, the fund has supported a wide range of initiatives including random on-road emission checks, public education campaigns, training of emission testing technicians, and research into improving air quality. One of its notable projects in 2023 was the “WhatsApp Spotter” program, which empowered citizens to report vehicles emitting excessive smoke in real time.
Environmentalists and transport sector professionals are voicing concern that centralizing the fund’s management could reduce the efficiency and independence of these operations. They argue that the fund’s unique structure—governed by a five-member board and protected under a trust deed—has enabled targeted, responsive decision-making without reliance on Treasury funding.
The origins of the VETTF lie in public advocacy dating back to 1998 and a landmark Supreme Court ruling in 2000, which led to its creation as a mechanism to independently support vehicle emission regulation.
While the Treasury has assured continuity of operations under centralized management, critics warn that losing the fund’s autonomy could dilute its impact, undermine transparency, and stall progress in reducing vehicular emissions in Sri Lanka.
