The NPP Government’s decision to declare the electricity sector an essential service marks a dramatic escalation in its handling of the Ceylon Electricity Board (CEB) restructuring, revealing deep fractures between reform ambitions and ground realities.

Officially, the unbundling of the CEB into four specialised State-owned companies is intended to modernise Sri Lanka’s power sector, improve efficiency, and align with IMF-backed reform commitments. Unofficially, the process has stalled, leaving thousands of employees in professional and financial limbo while the Government tightens legal controls to prevent industrial action.

The restructuring hinges on dissolving the existing CEB and transferring its assets, staff, and operations to newly created entities responsible for system operation, transmission, generation, and distribution. Parallel to this is a Voluntary Retirement Scheme designed to reduce staffing levels—an explicit requirement of international lenders.

However, the execution has been plagued by delays. Repeatedly postponed “appointed dates,” uncertainty over gazette notifications, and unresolved policy instruments have created a vacuum where neither the old structure nor the new one fully exists. Employees who committed to the VRS did so on the basis of official timelines that have since collapsed.

The human cost is becoming increasingly visible. Workers report selling vehicles and property at undervalued prices in anticipation of compensation that has yet to materialise. Overseas job offers have been withdrawn due to uncertainty over release dates, while immigration documents, medical reports, and police clearances are expiring unused. Families have been split across borders, surgeries postponed, and professional examinations deferred.

Trade unions argue that this is no longer a matter of administrative delay but a systemic failure with humanitarian consequences. They accuse both the Ministry of Power and Energy and CEB management of withholding clear information while proceeding selectively with elements of the reform.

Meanwhile, unresolved technical and legal issues continue to mount. The Electricity and Tariff Policy—essential for pricing, cost recovery, and investor confidence—remains incomplete after attracting strong opposition during public consultations. Renewable energy developers warn that the proposed framework could destabilise existing investments, particularly rooftop solar projects.

Equally concerning is the absence of operational agreements between the successor companies. Without signed power purchase and sales contracts, the unbundled entities may be legally established but functionally paralysed.

Against this backdrop, the declaration of electricity as an essential service is seen by many unions as a pre-emptive strike against dissent rather than a solution to the crisis. While the Government insists the measure is necessary to protect the public, critics argue it exposes a governance approach that prioritises control over consensus.

As the NPP Government presses ahead, the CEB restructuring risks becoming a case study in reform without readiness where emergency laws replace dialogue, and uncertainty becomes the most powerful force shaping Sri Lanka’s energy future.

The Constitutional Council will study the proposal submitted by the President regarding the appointment to the post of Auditor General and reach a final decision on February 3, Minister Bimal Rathnayake said.

He noted that the President has submitted the name of a nominee to the Constitutional Council for the post of Auditor General for the fifth time.

Although the Constitutional Council was scheduled to meet today to take a final decision on the appointment, Minister Rathnayake said the meeting has been postponed and the Council will instead convene next Tuesday to make its determination.

“The President has submitted a new name, and members require some time to study it. Therefore, we will take a decision on this matter on February 3, which is also the day Parliament reconvenes,” the Minister said, speaking to the media in Kandy today.

Sri Lanka is set to call for investment proposals to redevelop the historic Bogambara Prison, with plans to transform the former jail into a commercially viable project while preserving its architectural and historical heritage, officials said.

Authorities stated that investment opportunities will be invited shortly to redevelop the 135-year-old prison complex, potentially as a hotel or mixed-use development. Any redevelopment will be carried out in a manner that safeguards the building’s original structure and distinctive architectural features. The prison consists of three floors, each containing 108 cells.

Bogambara Prison, constructed on reclaimed land following the filling of the Bogambara Lake, was officially closed on January 1, 2014. Historical records note that the building was architecturally designed by F. Vine.

The prison occupies a significant place in Sri Lanka’s penal and political history. It is recorded as the country’s only prison equipped with a gallows capable of carrying out two executions simultaneously. Among those executed at the facility were W.A. Siripala, popularly known as “Maru Sira,” and the renowned outlaw Utuwankande Sura Saradiyel.

Historical accounts also state that during executions, all entry gates to the prison were kept open to allow any last-minute reprieve orders to be delivered without obstruction, even at the final moment.

Several prominent political leaders were also incarcerated at Bogambara Prison, including Colvin R. de Silva, Philip Gunawardena and William de Silva.

Officials said the proposed redevelopment aims to reimagine the historic site for modern use, while ensuring that its rich past is carefully preserved and interpreted for future generations.

Prime Minister Dr. Harini Amarasuriya stated that the development of quality human resources is essential to ensure the country’s economic, social and cultural security, underscoring that education plays a decisive role in achieving this objective.

She emphasised that the Government is firmly committed to transforming the education sector and will continue to move forward with a clear vision and purpose, overcoming challenges encountered along the way.

The Prime Minister made these remarks while addressing the ‘EDCS Sisu Nena Pranama’ scholarship award ceremony held today (31) at Temple Trees. The event was organised to recognise the children of members of the Education Co-operative Society (EDCS) who have been selected to state universities for the 2023/2024 academic year.

Elaborating further, Dr. Amarasuriya said the programme, organised by the Education Service Employees’ Co-operative Thrift and Credit Society Ltd, goes beyond financial assistance and serves as a platform to appreciate the dedication of students and parents who are preparing to shoulder the responsibility of shaping the country’s future.

She also noted that it is a significant achievement that the society, which began in 1930 with just 58 members and a membership fee of one rupee, has grown into the largest cooperative society in South Asia, with a current membership of around 215,000.

Highlighting the rapid changes taking place globally, the Prime Minister stressed the growing need to strengthen human resources amid economic and environmental challenges, according to a statement issued by the Prime Minister’s Office. She pointed out that the education system must be transformed from the school level itself to meet the demands of the modern world, and urged students entering universities to become leaders and active contributors to this transformation.

Noting that nearly 300,000 students enter primary education each year but only about 40,000 gain admission to universities, the Prime Minister called on the beneficiaries to make the best use of this opportunity for the development of the country.

Addressing the event, Deputy Minister of Labour and General Secretary of the Ceylon Teachers Service Union, Mahinda Jayasinghe, said that due to corruption-free management, the society’s financial stability had increased from Rs. 1,200 million to Rs. 1,700 million within a short period of around nine months.

Under this year’s programme, scholarships amounting to over Rs. 13.7 million were awarded to 2,292 students selected to state universities.

The scholarship scheme, which began in 1984 with 15 students and an initial fund of Rs. 3,500, has been conducted continuously for 41 years. At present, scholarships of up to a maximum of Rs. 75,000 per student are awarded, reflecting the collective strength and solidarity of the teaching community.

Showers will occur at times in Northern, North-Central and Eastern provinces and in Matale and Nuwara Eliya districts. Fairly heavy falls above 50 mm are likely at some places in Northern province and in Trincomalee and Batticaloa districts.

Several spells of shower will occur in Uva and North-western provinces.

Showers or thundershowers are likely at several places in other areas of the island after 2.00 p.m, and fairly heavy falls above 50 mm are likely at some places.

Misty conditions can be expected at some places in Western, Sabaragamuwa and Central provinces and in Galle and Matara districts during the early hours of the morning.

The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.

Mahendra Amarasuriya

Ken Balendra (award accepted by Krishan Balendra)

Sohli Captain

Rohini Nanayakkara

Aban Pestonjee 

The Sri Lanka Institute of Directors (SLID), in partnership with the Association of Chartered Certified Accountants (ACCA), on Wednesday hosted the inaugural National Corporate Director Awards 2025. British High Commissioner Andrew Patrick was the Chief Guest. The Guest of Honour was Securities and Exchange Commission (SEC) Chairman Senior Professor D.B.P.H. Dissabandara, whilst International Finance Corporation (IFC) Principal Country Officer Victor Antonypillai was Special Guest. A key highlight was the awarding of Lifetime Achievement Awards to a select group of eminent corporate personalities for their outstanding service and contribution to the respective companies and the country, apart from unique feats. They were Mahendra Amarasuriya, Ken Balendra (Posthumously), Sohli Captain, Rohini Nanayakkara, and Aban Pestonjee. Pix by Sameera Wijesinghe

DAILY FT

Sri Lanka’s equity market is entering 2026 on an unusual footing: buoyed less by foreign capital and more by the growing confidence of domestic investors. According to Asia Securities PLC Chairman Dumith Fernando, this shift reflects a combination of interest rate stability, improving financial literacy, and favourable tax treatment factors that are reshaping market dynamics and investor behaviour.

Interest rates remain a central variable. Fernando expects movements of only 50 to 100 basis points, a range unlikely to materially disrupt asset allocation. With yields on fixed income instruments stabilising, equities continue to offer comparatively attractive long-term returns. This relative balance, he argues, reduces the risk of sudden capital flight from stocks to bonds, supporting valuation stability.

What distinguishes the current cycle is the rapid expansion of the local investor base. Data from the Central Depository Systems shows active equity investors increasing to around 98,000 in 2025, up from roughly 60,000 in 2024. New CDS account openings tripled year-on-year to 57,000, with another 5,000 accounts opened in just the first three weeks of 2026. This surge signals a structural rather than speculative shift, driven partly by the absence of capital gains tax and a relatively modest 15% withholding tax.

From a macroeconomic standpoint, deeper domestic participation reduces Sri Lanka’s historic dependence on volatile foreign portfolio flows. In previous cycles, foreign exits amplified market downturns, weakened the currency, and strained monetary policy. A locally anchored market offers greater resilience, helping to stabilise household wealth and corporate financing conditions.

Fernando also cautioned against pessimistic index projections. Lower market targets, he noted, would imply either subdued corporate earnings or sharp valuation compression—scenarios that would require a sudden rise in equity risk premiums. Given improving macro stability and earnings recovery in several sectors, such a shift appears unlikely.

Foreign investors, meanwhile, are no longer treating emerging markets as a single asset class. Global capital is increasingly selective, favouring diversification and liquidity. While Sri Lanka may benefit from this trend, Fernando stressed that foreign inflows are not essential for equities to deliver 20–25% growth, with overseas interest representing potential upside rather than a prerequisite.

However, equity market performance is not isolated from the broader economy. Stronger equity valuations improve firms’ access to capital, encourage private investment, and support job creation particularly in growth sectors such as digital services and telecommunications. In this sense, a domestically driven equity rally may play a stabilising role in Sri Lanka’s post-crisis recovery, provided confidence in macro policy is maintained.