📈 Treasury Unlocks Contract Repricing for Govt. Suppliers

The Treasury has issued Public Finance Circular No. 03/2026, authorized by the Cabinet and the National Procurement Commission, to provide financial relief to contractors hit by the Middle East conflict and Cyclone Ditwah. • Overall Relief Measures: Government institutions can now revise prices and extend procurement timelines to absorb rising fuel, freight, and material costs. The temporary measures apply retrospectively and are valid until 30 September 2026 for bids closed on or before 1 March 2026. • Sector Impact: The construction sector is set to be the primary beneficiary. Under the new guidelines, fixed-price public works contracts can utilize specific formulas to ease financial pressures and prevent project delays. • Key Breakdown by Contract Type: - Short-term Works (≤ 3 months): Eligible for CIDA’s Simplified (Composite) Price Adjustment Formula for fuel and material fluctuations. - Long-term Works (> 3 months without price adjustment provisions): Can apply either the CIDA Standard or Simplified Formula. - Goods & Services: Price adjustments will be determined via indices like the Producer Price Index (PPI) and freight indices, or through documented evidence (invoices, Customs declarations) if indices are unavailable. • Funding & Future Tenders: Chief Accounting Officers must secure funding via existing provision transfers or supplementary Budgets. All future tenders must strictly incorporate price adjustment provisions under the 2024 Procurement Guidelines.