By:Staff Writer
September 02, Colombo (LNW): The National People’s Power (NPP) government has moved forward with the restructuring of the Ceylon Electricity Board (CEB), issuing new regulations for a Voluntary Retirement Scheme (VRS) aimed at employees unwilling to transfer to the newly created successor companies.
While the step is presented as part of long-awaited reforms, it has also drawn questions about the government’s changing stance given that some of its leading members once strongly opposed similar plans under the previous administration.
From Protest to Implementation
The restructuring follows the Sri Lanka Electricity Act No. 36 of 2024, which sets out a framework to unbundle the CEB. Earlier drafts under Ranil Wickremesinghe’s government proposed dividing the utility into as many as eight to twelve separate entities. That figure has now been reduced to four successor companies.
The move was one of several reforms linked to International Monetary Fund (IMF) recommendations for improving financial sustainability in the energy sector. Yet, during Wickremesinghe’s tenure, NPP factions particularly its JVP leadership vocally protested against the unbundling, warning it could open the door to privatization and job losses.
Today, with the same policy continuing under their own administration, the shift in position has drawn attention. The government’s justification is that restructuring is now being pursued with greater safeguards for workers and stronger public oversight.
Voluntary Retirement Scheme: Key Features
The newly gazetted VRS, issued on 26 August 2025 by Energy Minister Kumara Jayakody, lays out detailed compensation packages:
Permanent staff with over 10 years of service: Two months’ salary per completed year of service
1.5 months’ salary for each year of future service foregone Payments range from a minimum of Rs. 900,000 to a maximum of Rs. 5 million
Permanent staff with less than 10 years: Five months’ salary per year served, without additional payments for foregone service
Contractual/non-permanent staff: Two months’ salary per year served, with a minimum equal to one year’s salary. Employees under disciplinary action or with unsettled dues are ineligible, while those opting for the scheme cannot seek employment with the successor companies in future.
Pros and Cons of the Reform
Potential Benefits:
Unbundling may improve efficiency, transparency, and accountability in electricity generation, transmission, and distribution.
The VRS provides a structured, relatively generous exit package compared to past schemes in state enterprises, ensuring employees unwilling to adapt have an option.
Restructuring could reduce financial losses at the CEB and align operations with IMF requirements, strengthening investor confidence.
Concerns and Risks:
Critics warn that breaking up the CEB could fragment coordination, complicating service delivery in a sector already under strain.
The exclusion of interim allowances in VRS calculations and the ban on re-employment may discourage some employees from applying.
The political inconsistency opposing the same policy in opposition but implementing it in government—raises doubts about long-term commitment to coherent energy policy.
There is public apprehension that restructuring may pave the way, directly or indirectly, to partial privatization.
The Bigger Picture
For the NPP, the CEB reforms are part of broader institutional changes framed as modernization and anti-corruption. However, the political irony is difficult to ignore: the very leaders who once staged protests against unbundling are now responsible for carrying it out.
The government argues that current conditions—particularly Sri Lanka’s debt situation and IMF obligations leave little alternative but to proceed with reforms. Yet balancing fiscal discipline, worker protection, and reliable electricity services will be the real test.
