By: Staff Writer
November 05, Colombo (LNW): In line with the new government’s anti-privatization policy, the Ceylon Electricity Board (CEB) has set aside plans for privatization, opting instead to focus on an extensive internal restructuring strategy.
This approach aims to improve the utility’s operational efficiency, service standards, and financial sustainability.
The restructuring initiative was discussed and formalized during a Board of Directors meeting on October 23, where it was decided to reorganize the CEB into independent entities handling distinct aspects of electricity production and distribution.
The legislative foundation for these reforms lies in the new Electricity Act, passed by the Sri Lankan Parliament on June 6, 2024. Originally introduced on April 25, 2024, the bill was debated and later approved with a 44-vote majority. The Act supersedes previous CEB legislation, namely the Ceylon Electricity Board Act No. 17 of 1969 and the Sri Lanka Electricity Act No. 20 of 2009.
It advocates a structural overhaul that divides the state-owned utility into separate corporate units responsible for electricity generation, transmission, distribution, and trade. This unbundling is intended to enable each sector to operate more independently and efficiently.
A critical feature of the new Act is the establishment of the National Electricity Advisory Council, with the Public Utilities Commission of Sri Lanka (PUCSL) acting as the primary regulatory authority.
This change aligns with the government’s broader policy goals, aiming to make the CEB more transparent, accountable, and cost-effective.
Additionally, the new legislation envisions a single-buyer model for managing the utility’s finances, supported by stakeholder consultations to ensure open governance.
Despite these forward-looking plans, the legislative process faced a significant hurdle when the proposed bill was challenged in the Supreme Court.
The court ruled that several clauses were inconsistent with the Sri Lankan Constitution, necessitating amendments to bring the bill into compliance before its final approval in Parliament. The previous government addressed these concerns by amending the bill, allowing it to move forward in Parliament.
Under the newly endorsed restructuring framework, the government is set to retain ownership of all power plants and the nation’s transmission and distribution networks, thereby reinforcing its commitment to public ownership of essential utilities.
This move assuages privatization concerns while still allowing for private-sector involvement in certain areas of power generation, transmission, and distribution.
The restructuring also targets substantial improvements in service quality and customer satisfaction, along with efforts to lower Sri Lanka’s electricity costs, setting an ambitious goal to achieve the lowest rates in the region within five years.
The CEB’s leadership views these objectives as critical to meeting the country’s socio-economic needs while also supporting the wellbeing of its employees.
However, trade union representatives, particularly from the opposition Samagi Jana Balawegaya (SJB), have expressed concerns over this restructuring plan. SJB union leader Ananda Palitha argued that the division of CEB employees into newly created entities could lead to fragmentation within the organization.
At a recent press conference, Palitha criticized the government’s restructuring efforts as a continuation of previous policies under a different guise, citing concerns over job security and future privatization risks.
The restructured CEB will not only improve efficiency but is also expected to enhance accountability and transparency within the organization.
