The Ceylon Electricity Board Engineers’ Union (CEBEU) has issued a stark warning that the government’s sweeping power sector restructuring, under the Sri Lanka Electricity Act No. 36 of 2024, could unleash serious economic and operational risks — destabilising the state utility, burdening consumers, and discouraging investor confidence in the long run.

CEBEU Executive Comittee Member, Eng. Dhanuska Parakramasinghe, told The Island the restructuring effort, presented as a reform to improve efficiency, was being rushed through without transparency, stakeholder engagement, or a clear financial framework.

“This so-called restructuring is being packaged as reform, but it’s essentially a politically driven fragmentation of a strategic national utility,” Parakramasinghe asserted. “The consequences will not only hit employees — they will ripple across the economy, affecting tariffs, investor confidence, and national energy security.”

Under the new law, the CEB is set to be broken into multiple companies handling generation, transmission, and distribution. Parakramasinghe warned that this model, promoted as a solution to debt and inefficiency, mirrors failed experiments elsewhere in the region.

“Splitting the CEB without a proper regulatory and financial backbone is like dividing a heart into pieces and expecting it to beat,” he said. “The proposed entities will lack financial resilience, depend on unsustainable borrowing, and open the door to opportunistic private takeovers.”

The CEBEU argues that the government’s plan ignores the fundamental reality that the CEB, despite its challenges, provides reliable electricity to over 99% of the population — one of the highest coverage rates in South Asia.

Parakramasinghe cautioned that the restructuring would almost certainly lead to higher electricity tariffs for both households and industries, as private companies prioritise profit over affordability.

“When you introduce fragmentation and private interest into essential services, cost efficiency is lost,” he explained. “Consumers will end up paying more for less. This is not just a labour issue — it’s a national cost issue.”

Economists have also raised concerns that unbundling the CEB could deter long-term investors wary of political interference and policy inconsistency. “If the government’s objective is to attract private capital, the path it has chosen is the wrong one,” Parakramasinghe said. “Investors value stability and clarity — not rushed restructuring and regulatory confusion.”

The Union also accused authorities of coercing employees into an unfair Voluntary Retirement Scheme (VRS) designed to weaken the institution. Parakramasinghe described the scheme as “opaque, coercive, and deeply unjust,” alleging that it is being used to purge experienced professionals rather than strengthen the organisation.

“The so-called VRS has no transparency or fair valuation. It’s effectively a soft layoff mechanism to dismantle institutional memory and weaken collective resistance,” he said. “Once that knowledge is lost, rebuilding capacity will take years — something the country can ill afford.”

The CEBEU has already launched a phased industrial action campaign, now entering its second month, and has vowed to escalate if the government fails to respond. Parakramasinghe said engineers have so far maintained service continuity to minimise disruption to the public and the economy, but warned that patience is wearing thin.

“We have repeatedly urged dialogue, but the Ministry and the restructuring secretariat remain unresponsive,” he said. “If this continues, the union will have no choice but to intensify action — responsibly, but firmly.”

The Engineers’ Union emphasised that the real cost of this policy misstep will not be borne by engineers or bureaucrats but by the wider economy. Power supply instability, delayed generation projects, and tariff hikes could undermine industrial competitiveness, particularly in export-driven sectors such as apparel, rubber, and ceramics.

Parakramasinghe stressed that the Union is not opposing reform, but demanding that it be undertaken with proper governance, financial planning, and professional consultation.

“Electricity is not just another commodity. It is the economic bloodstream of the country,” he said. “Reforms must be transparent, economically sound, and rooted in national interest — not driven by short-term political optics.”

He urged the government to revisit the Electricity Act and hold inclusive consultations with engineers, economists, regulators, and the private sector before proceeding.

“The President and the Minister of Power must understand that ill-considered restructuring could push Sri Lanka’s power sector from a technical challenge to an economic crisis,” Parakramasinghe warned. “We are ready to contribute to genuine reform — but not to a process that dismantles what generations of professionals have built.”

A senior CEB official, contacted by The Island, declined to comment.

By Ifham Nizam