CEB reforms an absolute imperative

Few institutions in Sri Lanka symbolise inefficiency and economic vulnerability as starkly as the Ceylon Electricity Board (CEB). With a workforce of more than 26,000, the CEB is one of the largest state-owned enterprises in the country, and unfortunately, one of the most loss-making. 

Alongside the Ceylon Petroleum Corporation and SriLankan Airlines, the CEB has been a central contributor to the unsustainable financial haemorrhaging that culminated in the economic collapse and bankruptcy in 2022. Unless bold reforms are undertaken, the CEB threatens to drag the economy back into crisis.

For decades, the CEB has operated as a monopoly, shielded from both accountability and competition. Its bloated workforce, inefficiencies in power generation, poor management practices, and heavy reliance on costly thermal power have combined to saddle the Board with losses that are now unsustainable. Year after year, it has borrowed heavily to cover deficits, with taxpayers ultimately footing the bill. It is not merely an inefficient State entity but a structural risk to the entire economy.

The Government’s recent decision to register four new private limited companies, with plans for two more, represents an overdue and pragmatic step forward. Under this restructuring, electricity generation, transmission, administration, asset and liability management, as well as employee pension and provident fund responsibilities, would be divided and rationalised. Significantly, the CEB would remain under State control. This is not privatisation. Rather, it is an attempt to introduce efficiency and financial discipline into an institution long insulated from either.

Predictably, trade unions have mobilised in opposition. For years they have opposed any meaningful reform, blocking efforts to introduce private sector participation and modernisation. Their resistance has less to do with the welfare of the consumers, and more to do with preserving privileges within a monopoly that serves their interests. The result is that millions of ordinary citizens and businesses pay the price in the form of higher electricity tariffs, and risks to the debt-ridden economy.

The Government, however, now enjoys both a two-thirds parliamentary majority and a clear mandate from the people. That mandate must not be squandered. This is a historic opportunity to finally address the long-standing drain that loss-making State enterprises impose on the economy. Allowing trade unions to hold the country hostage, as they have in the past, would be both a political and economic betrayal.

Ideally, Sri Lanka should move beyond piecemeal restructuring and embrace deeper reform through breaking monopolies in the energy sector, encouraging competition, and opening the market to private participation. In many countries, such liberalisation has driven down prices, spurred investment in renewable energy, and improved service quality. But in the immediate term, the proposed reforms are at least a necessary first step to stop the bleeding.

Sri Lanka cannot afford another 2022. The lessons of that year must guide the Government’s choices now. The CEB is not just another public institution but one of the pillars upon which the economy stands. To leave it unreformed is to risk another collapse that the country simply cannot endure. The President and the Government must act decisively, ignore obstructionist resistance, and deliver on meaningful reform. Sri Lanka needs a power sector that is efficient, sustainable, and affordable and definitely not one that drags the economy into crisis year after year.