Editorial
According to a Colombo-based newspaper report, Sri Lanka’s India-backed Unique Digital Identity (SL-UDI) project has reached a troubling stage after financial proposals submitted by Indian companies for the Master System Integrator (MSI) role reportedly exceeded the value of the grant pledged by the Indian government by more than two times. The development has forced Sri Lankan officials to seek discussions with their Indian counterparts, exposing a major financial gap at the centre of a project that was presented as a key digital transformation initiative.
India pledged a grant of INR 3 billion, approximately Rs. 10.5 billion, for the implementation of the project. However, according to sources cited in the report, the lowest evaluated bid among the technically qualified Indian companies was around INR 7 billion, approximately Rs. 24.6 billion. The difference between the promised funding and the actual quoted cost has raised serious questions over the financial planning and expectations surrounding the agreement.
The issue is not simply about a higher-than-expected price. It goes to the heart of how major national projects are negotiated, evaluated, and delivered. A project promoted as a grant-supported initiative now faces the reality that the available funding may not match the cost proposed by the companies expected to build the system. For Sri Lanka, which continues to manage economic pressures and public spending challenges, such a gap cannot be treated as a minor technical issue.
Five Indian companies — Infosys Ltd, Tata Consultancy Services Ltd, Protean e-Gov Technologies Ltd, RailTel Corporation of India Ltd, and Bharat Electronics Ltd — passed the technical assessment stage for the MSI role. The selected company will be responsible for creating the country’s digital identity infrastructure from the ground up, including supplying hardware for two major data centres, customising the MOSIP software platform, and deploying 900 biometric enrolment kits equipped with fingerprint and iris scanning technology.
The scale of responsibility placed on the MSI makes the financial issue even more significant. This is not a small technology contract but a project that will create a core government identity framework affecting millions of citizens. Any uncertainty surrounding cost, implementation, and long-term control requires careful examination before Sri Lanka commits further resources.
Deputy Minister of Digital Technology Eranga Weeraratne confirmed that the quoted bids were higher than earlier anticipated and said Sri Lanka had requested discussions with the Indian government to determine the next steps. Hans Wijayasuriya, Chief Advisor to the President of Sri Lanka on Digital Economy, also stated that the memorandum of understanding between Sri Lanka and India contains provisions requiring discussions if tender amounts exceed the grant amount.
The Indian High Commission has stated that the evaluation process is still ongoing and that no final decision has been taken on the Indian side. However, the financial mismatch has already placed Colombo in a difficult position. The central question now is whether Sri Lanka’s expectations from the agreement align with the actual financial and technical realities emerging from the tender process.
The controversy surrounding the SL-UDI project reflects the risks involved when countries enter major technology partnerships without complete clarity on future costs and obligations. Digital infrastructure projects require transparency, strict financial discipline, and agreements that protect national interests.
Sri Lanka’s government must now secure clear answers on how a project initially backed by a fixed grant amount has reached a stage where the lowest evaluated proposal is more than double that allocation. The outcome of discussions between Colombo and New Delhi will determine whether the project moves forward under revised conditions or whether further questions emerge over the structure of the partnership.
The SL-UDI project was intended to represent technological cooperation. But the latest developments show that cooperation must also be measured by affordability, accountability, and whether the final arrangement delivers the value Sri Lanka was led to expect.
