In a dramatic intervention, the Ceylon Chamber of Commerce has blown the whistle on flaws in Sri Lanka’s Draft Public-Private Partnership Bill, warning that without urgent investor-friendly reforms, the country risks losing billions in private capital and remaining trapped in its infrastructure crisis.
The Ceylon Chamber of Commerce has submitted a sweeping set of recommendations to the Government aimed at reshaping Sri Lanka’s Draft Public-Private Partnership (PPP) Bill into a credible, investor-friendly, and internationally respected framework. The Chamber argued that unless sweeping reforms are introduced, the current draft risks creating a fragile and overly politicized PPP environment that will repel international financiers rather than attract them.
At a time when Sri Lanka is struggling to rebuild after its worst economic collapse in decades, the Chamber made it clear that the stakes are too high for cosmetic adjustments. A strong PPP framework is urgently required to mobilize private investment, stimulate economic growth, create employment, and close the gaping infrastructure deficit that is crippling the nation.
In its submissions, the Chamber commended several positive features of the Bill. These included mandatory value-for-money (VfM) and feasibility assessments in line with OECD and World Bank standards, cost–benefit analyses, and fiscal sustainability tests. Provisions mandating stakeholder consultation, public disclosure, and adherence to National Procurement Commission guidelines were also applauded as steps toward strengthening transparency.
The draft legislation also clarifies risk allocation to the private sector while offering safeguards such as lender and government step-in rights, refinancing benefit-sharing mechanisms, and structured contract management. Most notably, the Bill proposes creating a National PPP Agency (NAPP) with policy, appraisal, and project registry functions. The Chamber noted that if implemented properly, these provisions could significantly improve investor confidence and encourage private sector participation in national development.
Yet, beneath these promising features, the Chamber exposed critical flaws that threaten to derail the entire framework. The most alarming concern is the lack of independence for the proposed PPP Agency. Current provisions give sweeping powers to the Minister of Finance and political appointees over board control, remuneration, and operational oversight. According to the Chamber, such unchecked ministerial influence risks transforming the PPP system into another vehicle for political patronage rather than a credible platform for investment.
To restore credibility, the Chamber recommended stripping back ministerial powers and introducing independent Parliamentary or Constitutional Council oversight for board appointments. It also called for strict qualifications for board members, separation of CEO and secretary roles, and longer board tenures of five years instead of three, to align with the long lifecycle of PPP projects.
Another area where the Chamber demanded change was transparency. It urged mandatory publication of the PPP project pipeline, feasibility study summaries, and signed contracts, limiting confidentiality strictly to trade secrets or intellectual property. It further called for annual PPP fiscal risk reporting annexed to the national Budget to improve public scrutiny and investor trust.
The Chamber also zeroed in on project evaluation and procurement, calling for the establishment of specialized Technical Evaluation Committees and Commercial Evaluation Committees to assess feasibility, capacity, and financial models. These bodies, it said, must align their work with Cabinet-appointed negotiation committees to ensure effective and consistent decision-making. Importantly, the Chamber stressed the need for a single-window mechanism to fast-track licenses, permits, and approvals, arguing that Sri Lanka’s entrenched bureaucracy has long discouraged private investment.
The issue of unsolicited proposals (USPs) was another red flag. Current guidelines allow direct negotiations with little transparency. The Chamber recommended the adoption of international best practices such as the Swiss challenge mechanism, alongside strict timelines and mandatory disclosure of financing sources. Such measures would prevent conflicts of interest and shield Sri Lanka from accusations of backdoor deals.
On contract management, the Chamber stressed the need for flexibility to allow amendments that keep projects viable, but it warned against overbroad exclusivity clauses that could create monopolies and harm consumers. Step-in rights should be defined with clear triggers and timelines, it said, to protect continuity and public interest.
Dispute resolution was flagged as another weak link. The Bill relies heavily on arbitration with restrictive clauses that could deter global financiers. The Chamber urged for greater flexibility in selecting arbitration forums, while promoting mediation as a cost-effective first-line mechanism, aligning Sri Lanka with its commitments under the Singapore Convention on mediation.
The Chamber also demanded Environmental, Social, and Governance (ESG) standards be integrated into the framework, a move that would attract international funding while ensuring projects align with long-term social and environmental goals. Legal clarity was another concern, with the Chamber recommending the PPP Act stand alone and avoid overlaps with existing legislation like the Public Finance Management Act, the BOI Act, and the Urban Development Authority Act. Importantly, it warned against applying the Act retrospectively, which would damage investor confidence and create unnecessary legal disputes.
Financial structuring was also addressed. The Chamber recommended that private partners be permitted to secure financing through contractual rights, receivables, movable assets, and equity interests, while restricting security over state-owned immovable property vital to public service. It further emphasized the importance of step-in and substitution rights to ensure continuity.
Ultimately, the Ceylon Chamber’s message was blunt: without these reforms, the PPP Bill risks collapsing under the weight of political interference, opaque procedures, and investor mistrust. With Sri Lanka’s infrastructure in crisis and its economy in dire need of fresh private capital, failure is not an option.
The Chamber concluded by reaffirming its commitment to work with the Government to implement a transparent, credible, and globally aligned PPP framework. A framework, it argued, that will not only attract billions in investment but also safeguard public accountability, drive sustainable development, and finally bridge Sri Lanka’s crippling investment gap.
If these recommendations are ignored, however, Sri Lanka risks turning the PPP Bill into another political gimmick—one that could set back national development for decades to come.
