The Finance Ministry has withdrawn preferential treatment previously given to state-owned enterprises (SOEs) and local companies in state sector procurement, citing market failures due to underperformance in certain domestic manufacturing sectors. Under the previous administration, circulars issued by the Gotabaya Rajapaksa government in 2020 provided special preference to public enterprises in competitive bidding processes.
However, these circulars have been rescinded by the Finance Ministry, led by President Ranil Wickremesinghe, due to adverse effects on suppliers and limited bidder participation. Despite this reversal, preferential treatment for regional construction contractors for projects up to Rs. 50 million, introduced in 2016 by the Maithripala Sirisena administration, remains unchanged, aiming to promote regional participation in government projects.