A simmering confrontation between the government and the powerful Ceylon Electricity Board (CEB) trade unions intensified yesterday, with the latter signalling continued industrial action, even as authorities moved decisively to prevent any disruption to electricity supply.

The dispute centres on the government’s determination to restructure and unbundle the CEB under amendments to the Electricity Act, a reform drive officials describe as unavoidable to curb losses, strengthen governance and stabilise the national power sector. This has also been a long-standing demand of international donors, particularly the International Monetary Fund and the World Bank.

Some 24 CEB unions, including powerful engineers’ and workers’ organisations, have rejected the move, warning that the proposed restructuring could weaken institutional coordination, undermine job security and eventually place additional pressure on consumers.

Union representatives said work-to-rule campaigns and other limited forms of industrial action would continue, despite electricity services being declared an essential service — a legal measure that effectively curtails full-scale strike action.

“These reforms are being imposed without proper consultation. Decisions taken in haste could have serious consequences for grid stability and public confidence,” a senior union official told The Island.

The government, however, has adopted a firm posture, cancelling all categories of leave for CEB staff and directing management to ensure uninterrupted operations across generation, transmission and distribution.

A senior official at the Power and Energy Ministry said the administration would not allow labour unrest to jeopardise electricity supply, stressing that energy security was central to economic recovery.

“Electricity is a critical public service. Any attempt to disrupt supply will be dealt with firmly,” the official said.

Engineers’ unions have separately cautioned that restructuring without a clearly articulated technical and regulatory framework could compromise long-term planning and system reliability, though they have stopped short of calling for an outright shutdown.

Despite ongoing discussions between union leaders, CEB management and government representatives, there is no indication of an early resolution, raising the prospect of a prolonged standoff at one of the country’s most strategically important state institutions.

The dispute unfolds amid Sri Lanka’s IMF-backed reform programme, under which state-owned enterprises — particularly in the energy sector — are under increasing pressure to reduce losses and ease the burden on public finances.

Analysts warn that sustained unrest at the CEB could complicate reform timelines and dent investor confidence, even as the government seeks to signal policy resolve.

A retired CEB top official said: “For now, while major strike action remains legally constrained, the confrontation has once again placed the power sector at the centre of national debate, with consumers and businesses watching closely for any fallout.”

By Ifham Nizam ✍️