The Sri Lanka Transport Board (SLTB) incurred a loss of Rs. 3.01 billion in 2024 during the procurement of 500 buses, according to a report by the National Audit Office. The buses, initially estimated to cost Rs. 5 million each, were purchased at Rs. 11.02 million, resulting in an overpayment of Rs. 6 million per bus.
The loss occurred due to changes made to the original procurement decision under verbal instructions from the Transport Minister, which lacked scientific justification. The SLTB had initially planned to utilize the remaining US$ 20 million from an Indian loan agreement to replace aging buses over 15 years old and ensure uninterrupted urban transportation services.
The procurement process began on May 23, 2018, to purchase 400 buses with 50-54 seats and 100 buses with 32-35 seats. However, on January 1, 2020, the Transport Minister altered the plan to procure 500 smaller buses with 32-36 seats and 100 buses with 42-45 seats. Subsequently, on January 3, 2023, a decision was made to procure 500 Ashok Leyland Kynx buses with 32 seats each at US$ 26,662.50 per bus, amounting to a total payment of Rs. 5,551 million.
The National Audit Office highlighted the absence of transparent decision-making and adherence to proper procurement guidelines, which led to the inflated costs. This financial mismanagement raises concerns over the efficient use of public funds and emphasizes the need for accountability in such processes. The overpayment represents a significant missed opportunity to allocate resources to other critical sectors, underlining the importance of stringent oversight in public sector procurements.
