The government has brought forward the procurement cycle for development projects in the hope of spending the full Rs. 2,000 billion in capital expenditure planned for 2027 — an allocation larger than any it has succeeded in spending.
Cabinet Spokesman Nalinda Jayatissa told the weekly Cabinet media briefing that ministries have been told not to wait for the budget to pass before starting work, EconomyNext reported.
“If you plan to start in January, you will only be able to actually get it underway around May,” he said.
Under the change, ministries may prepare plans and estimates and run tenders before the budget is voted, holding back only the contract award. “Carry out the procurement activities, and wait until the budget is passed only to award the contract,” Jayatissa said.
He put the sequence precisely: once the budget passes on 14 December and the Speaker signs it, ministries will know their allocations within December, and “awarding can be made starting even from the first week of January, if needed.”
“It is that very process that we have granted approval for across all ministries. It is along with that that we expect to spend this 2,000 billion.”
The record the plan is up against
Jayatissa conceded this year will fall short. “Spending 100 percent might not be possible in this year due to various technical reasons. In some places there were issues with tenders; in some places there were issues in the procurement process.”
EconomyNext reports Finance Ministry officials as putting nine-month spending at less than 25 per cent of the allocated Rs. 1,340 billion.
Two details there are worth separating from the headline. First, the base figure in that sentence does not match the one in circulation elsewhere: this desk reported in October that nine-month capital spending was Rs. 385 billion against an allocation of Rs. 1,380 billion — about 27.9 per cent — and Rs. 1,380 billion is the figure EconomyNext’s own earlier reporting on the same budget line has used. The Rs. 1,340 billion in Tuesday’s filing appears to be a slip for Rs. 1,380 billion, though the filing does not say so.
Second, the government has consistently said most capital spending lands in the final quarter, so a nine-month figure is not a straight-line forecast of the year.
And the Rs. 2,000 billion itself is contested
The Rs. 2,000 billion headline has been repeated by both the President and the Cabinet spokesman for months. But this desk reported in October that the 2027 Appropriation Bill puts capital expenditure at Rs. 1,752.5 billion — a gap of roughly Rs. 250 billion between the political figure and the legislative one. Tuesday’s filing does not address the discrepancy, and the budget has not yet been voted.
Why it matters
EconomyNext’s analysis section attributes the chronic shortfall to bureaucratic delay, protracted procurement disputes, politicised project selection and thin technical capacity in line ministries, and argues the cost is lower productivity, worsening infrastructure bottlenecks and reduced GDP potential. It adds that in a post-default setting, persistent under-spending signals to lenders and investors an institutional inability to absorb capital — the opposite of what a country trying to grow out of a debt burden needs to demonstrate.
The procurement change is the operational follow-through on a reform the President set out in October, which included pre-guaranteed Treasury funding and sector-specific procurement rules.
Not reported
The filing does not say which ministries have been granted the early-procurement approval, what legal basis allows tendering against an unvoted appropriation, or what happens to a tender run before a budget that Parliament then amends. It gives no sector breakdown of the Rs. 2,000 billion, no target utilisation rate, and no explanation for the Rs. 1,340 billion base figure. It does not reconcile the Rs. 2,000 billion with the Appropriation Bill’s Rs. 1,752.5 billion.
