A report from the National Audit Office has revealed that the Sri Lanka Transport Board (SLTB) overspent by Rs. 6 million per bus in the procurement of 500 buses in 2023, resulting in a total loss of over Rs. 3,010 million.
This financial setback arose due to a change in the decision to purchase the buses, which was made on the verbal instructions of the Minister, without any scientific justification. The decision was originally based on the remaining US$ 20 million from the loan received by the Sri Lankan government under the Indian Loan Agreement.
The audit report further details that the procurement process was initiated following a Cabinet policy decision made on 23rd May 2018. This decision outlined the purchase of 500 buses: 400 new buses with 50-54 seats (2×2 configuration) and 100 smaller buses with 32-35 seats (2×2 configuration), intended to replace buses over 15 years old and ensure the smooth continuation of urban services.
The necessary steps, including preparing procurement documents and technical specifications, were taken to call for bids. However, on 1st January 2020, the then Minister of Transport altered the original Cabinet decision. Acting on verbal instructions, the Minister changed the procurement plan to purchase 600 buses—500 mini-buses with 32-36 seats and 100 larger buses with 42-45 seats, despite the lack of a scientific basis for the change.
According to the audit report, the final decision, as per the Cabinet directive on 3rd January 2023, was to procure 500 Ashok Leyland Kynx buses with 32 seats each, priced at USD 26,662.50 per bus, totaling USD 13,311,250. The procurement was awarded, and the total payment made for these buses was Rs. 5,551 million, with each bus costing Rs. 11.02 million.
The report highlights a significant discrepancy, showing that the estimated cost for a 32-35 seat bus was Rs. 5 million, yet Rs. 3,010 million more than expected was paid, bringing the cost of each bus to Rs. 6.02 million over the original estimate.
