The Sri Lanka PPP Act will create a unified framework for infrastructure projects, strengthen investor confidence and support Port City growth.
The Sri Lanka PPP Act is expected to reach Parliament in the third quarter of 2026, creating a unified legal framework for major infrastructure projects.
The proposed Public-Private Partnership law will regulate projects developed jointly by the government and private investors.
It aims to address Sri Lanka’s long-standing lack of a clear national framework for identifying, evaluating and implementing PPP projects.
Board of Investment Director General Sulakshana Jayawardena said the law would establish consistent rules for PPP contracts across the country.
It will replace the existing approach to project identification, appraisal and implementation with a standardised process.
A central requirement will be a full value-for-money assessment and feasibility study before the government enters any PPP agreement.
The framework will also follow the Public Finance Management Act, No. 44 of 2024. This should strengthen financial discipline and transparency throughout each project’s lifecycle.
Sri Lanka PPP Act to Protect State Assets
The proposed legislation seeks to correct several weaknesses in the present regulatory system.
Sri Lanka currently lacks a national PPP policy and detailed guidance on risk assessment, feasibility studies and the allocation of responsibilities.
The new law will set clearer limits and obligations for both the public and private sectors.
Officials expect these safeguards to reduce the risk of state assets being misused through poorly structured or politically influenced agreements.
The framework also aims to provide investors with greater legal certainty. Its rules should remain consistent even when governments or national policies change.
Enhanced capital allowances under the new system are expected to align with incentives offered through the Strategic Development Projects Act.
The government hopes this combination of legal protection and financial incentives will encourage more private investment in national development.
Port City Colombo Could Gain Investor Confidence
Port City Colombo could become one of the largest beneficiaries of the new framework.
The project already operates as a major partnership between the Government of Sri Lanka and CHEC Port City Colombo.
The BOI has identified several locations inside Port City that are ready for development through PPP arrangements.
BOI Executive Director Priyanka Samaraweera said officials had identified structural projects within the development for implementation through partnerships.
The absence of a clear legal framework had previously contributed to delays in attracting foreign investors.
However, the Sri Lanka PPP Act is expected to give investors greater confidence by establishing transparent rules and enforceable obligations.
Port City’s special economic zone already offers a low-risk financial environment, 100% foreign ownership and fiscal incentives lasting more than 25 years.
The new law will provide a clearer mandate for additional commercial and economic ventures within the development.
Port City Colombo is projected to generate around 143,000 direct jobs when fully completed.
It is also expected to attract an estimated US$15 billion in foreign direct investment.
Techno-Parks Planned Beyond Port City
The government intends to apply the PPP framework beyond Colombo.
The BOI has identified locations in Kurunegala, Galle, Digana and Nuwara Eliya for techno-park developments under public-private partnerships.
The Asian Development Bank has already supported the preparation of concession agreements for these projects.
Officials view that assistance as evidence that structured PPP agreements can work successfully when investors receive clear legal and financial protections.
The new law will apply common rules to PPP projects across all regions and economic sectors.
The government believes the reforms can provide the stable legal foundation required for private-sector expansion.
However, the framework’s success will depend on rigorous appraisals, transparent procurement and consistent enforcement.
If implemented effectively, the legislation could strengthen investor confidence, protect public assets and accelerate infrastructure development across Sri Lanka.
