The Ministry of Power and Energy has taken a significant step toward reforming the Ceylon Electricity Board (CEB) by proposing to divide it into three separate state-owned institutions to oversee electricity generation, transmission, and distribution. According to Pubudu Niroshan, Director General of the Power Sector Reform Secretariat, this recommendation was made by a committee appointed to review the Sri Lanka Electricity Act, marking a shift from the previous plan that proposed breaking the CEB into 12 entities, some of which were set to be privatized.
Speaking to the media, Pubudu Niroshan explained that alongside these three institutions, an additional government-owned body would be established to handle planning, procurement, and construction within the power sector. The new framework aligns with the government’s broader energy policy, which prioritizes keeping key energy-related entities under state control.
The review committee published its internal report on the necessary amendments to the Sri Lanka Electricity Act on January 20. Stakeholders, including industry experts, energy sector professionals, and the general public, have been invited to submit their comments in writing on the proposed restructuring until February 14. Submissions can be sent via post to the Ministry of Power and Energy, No. 437, Galle Road, Colombo 03, or through email at reforms@powermin.gov.lk.
One of the major changes in the proposed amendments is the departure from the previous Electricity Act provisions, which initially outlined splitting the CEB into 12 institutions, with only three remaining under state control while the remaining nine were to be privatized or operated as public-private partnerships. The revised plan, however, ensures that all three entities for generation, transmission, and distribution remain under government ownership. Additionally, the government intends to establish a national institution dedicated to power sector planning and infrastructure development, ensuring a more streamlined approach to future energy projects.
Another significant aspect of the restructuring plan is the creation of a government trust fund to provide Employees’ Provident Fund (EPF) and Employees’ Trust Fund (ETF) benefits to both active and retired CEB employees. This move aims to address concerns about job security and employee welfare as the industry undergoes transformation.
Apart from structural changes, the Electricity Act amendments also focus on improving transparency and efficiency in the power sector. The proposed reforms include measures to eliminate corruption, prevent employee malpractices, and ensure better regulatory oversight. According to Pubudu Niroshan, the government is also taking steps to reduce electricity costs for consumers. Currently, Sri Lanka has the highest electricity tariffs in the region, with an average unit price of Rs. 39. The government aims to bring this down to Rs. 24 per unit over the next five years, making Sri Lanka’s electricity costs the most affordable in the region.
With these proposed changes, the government seeks to modernize the power sector, improve operational efficiency, and ensure long-term sustainability. While the restructuring plan is still in its consultation phase, the outcome of stakeholder feedback and further government deliberations will determine the final course of action in implementing these reforms.
This functional split is a good thing in my opinion. It reduces the chances of poor decision making in the case of a single owenership structure and that in turn leads to customer detriment. Essentially assets and operations ought to be separately owned and managed.
it is disappoitning that they still choose the route of overall state control, but that is the ideological choice of the current government. it is unlikely to deliver as good customer benefits as divestment but they have made their choice.