Sri Lanka Digital Identity project faces a major funding gap after bids exceeded India’s pledged financial assistance, prompting urgent bilateral talks.
Sri Lanka Digital Identity project negotiations have entered a critical phase after bids submitted for the India-funded initiative exceeded the financial assistance originally pledged, prompting the government to seek urgent discussions with Indian authorities.
Sri Lankan officials have requested an urgent meeting with representatives of the Indian government after bids received for the Unique Digital Identity project were reported to be more than double the amount of financial assistance promised by India. According to the Sunday Times, the unexpectedly high bids have created a significant funding gap for the project, which is being implemented with Indian financial support.
Five Indian companies have successfully qualified on technical grounds to serve as the Master System Integrator (MSI) for the nationwide project. They are Infosys Ltd, Tata Consultancy Services Ltd, Protean e-Gov Technologies Ltd, RailTel Corporation of India Ltd, and Bharat Electronics Ltd.
The company that achieved the highest combined technical and financial evaluation submitted a proposal valued at approximately Rs. 7 billion Indian rupees, equivalent to about Rs. 24.6 billion Sri Lankan. However, India had committed financial assistance amounting to only Rs. 3 billion Indian rupees, or roughly Rs. 10.5 billion Sri Lankan, creating a substantial shortfall.
Deputy Minister of Digital Technology Eranga Weeraratne acknowledged that the bids received were significantly higher than anticipated. He said Sri Lanka has already requested discussions with the Indian government to determine how the project should proceed under the circumstances.
He further explained that the final selection would not depend solely on the lowest price. Instead, authorities will evaluate proposals based on overall technical capability as well as commercial value to ensure the project delivers long-term benefits.
President’s Senior Advisor on Digital Economy Hans Wijayasuriya also commented on the issue, noting that the Memorandum of Understanding signed between Sri Lanka and India contains provisions allowing both governments to negotiate if bid prices exceed the agreed funding amount.
Sri Lanka Digital Identity Project Faces Cost Challenge
Wijayasuriya said the agreement gives both countries flexibility to determine the next course of action through mutual consultation rather than automatically cancelling or delaying the project.
Meanwhile, a spokesperson for the Indian High Commission stated that no final decision has been reached because the evaluation process remains ongoing.
The spokesperson indicated that authorities are continuing to assess the technical and financial submissions before deciding how the funding issue should be addressed.
The Sri Lanka Digital Identity project is one of the country’s largest digital transformation initiatives. It includes supplying hardware for two major national data centres, developing the software platform required to manage the system, and installing 900 biometric registration kits across Sri Lanka.
The biometric equipment will capture fingerprints and iris scans to establish a nationwide digital identity system designed to improve public services and digital governance.
Hardware, Software and Future Operations
Under the current implementation plan, the selected Master System Integrator will build and commission the complete digital identity infrastructure.
After operating the system for one year, responsibility for managing the platform will be transferred to a Sri Lankan information technology company. Authorities have indicated that separate tenders will be called in the future to select the local operator responsible for the long-term management of the system.
The project remains under evaluation while Sri Lanka and India continue discussions on addressing the funding gap created by the higher-than-expected bids.
