The Supreme Court yesterday held that Clauses 32(3) and 32(4) of the Public Financial Management Bill are unconstitutional, and must only be passed by a Special Majority of Parliament and be approved by the people at a referendum. 

Transparency International Sri Lanka (TISL) challenged the Bill in the Supreme Court on the basis that Clause 32 seriously weakens the controls on public procurement, thereby increasing corruption risk and weakening the level playing field.

The Court held that Clause 32 (3), which allowed the Minister of Finance to exempt State Owned Enterprises (SOEs) from compliance with the procurement guidelines, and Clause 32 (4), which allowed Provincial Councils to adopt their own guidelines, violate Articles 3 and 12(1) of the Constitution. 

The Court proposed that Clause 32(3) to be amended to: “The National Procurement Commission may, if it deems necessary, formulate and publish in the Gazette specific guidelines for State-Owned Enterprises,” in which case the said inconsistency shall cease.

The Court proposed Clause 32(4) to be amended as “The National Procurement Commission may, if it deems necessary, formulate and publish in the Gazette specific guidelines for Provincial Councils.”

SC flags constitutional inconsistencies in Economic Transformation Bill