• Scrutiny over bonus demand amid high tariffs, debt-laden balance sheet
• Workers denied bonuses earlier due to losses, now CEB can afford it: Jayalal
• If there’s money for bonuses, then there’s space for lower tariffs: Consumers
• Cannot approve bonuses as policy when CEB is burdened with debt: Udayanga 

The Ceylon Electricity Board (CEB), Sri Lanka’s State-run utility, has once again found itself at the centre of public discourse. This time, it is over demands for employee bonuses amidst reported profitability.

The calls, led by Trade Unions (TUs), are reigniting debates over the board’s financial management, its responsibility to the public, and whether bonuses can be justified in the face of high electricity tariffs and a debt-laden balance sheet.

Trade unions argue that employees deserve their fair share of the board’s improved finances, but consumers see things differently. They contend that any surplus should first go towards easing the burden on the average household, many of which are struggling to keep up with cost-reflective tariffs.

As discussions over bonuses continue, the CEB faces a critical juncture. The question remains: will the CEB rise to the occasion, or will it continue to be a flashpoint in Sri Lanka’s ongoing struggle for economic stability and equity?

TUs defend employees

The Lanka Viduli Sevaka Sangamaya (LVSS), one of the key unions representing CEB employees, has taken the lead in pushing for bonuses to be paid before 10 December. According to LVSS General Secretary Ranjan Jayalal, a formal letter has been sent to the CEB Chairman urging swift action. 

“For years, employees were denied bonuses because of reported losses. Now that the board is making operational profits, it is only fair that the workforce benefits,” Jayalal stated.

The union has criticised past managements for failing to reward employees despite claims of financial improvement over the last two years. It believes that the current profitability offers a unique opportunity to acknowledge the contributions of the workforce.

Consumers challenge TU stance 

The union’s stance has not gone unchallenged. Consumer advocates and members of the public have raised a critical question: if the CEB is financially stable enough to pay bonuses, why haven’t electricity bills decreased? Many consumers argue that they have long borne the brunt of cost-reflective tariffs and are yet to see any tangible relief.

These tariffs, introduced as part of Sri Lanka’s economic stabilisation efforts, were designed to ensure that the cost of generating and supplying electricity was fully covered by revenue from consumers. While the approach helped stabilise the CEB’s finances, it came at a steep price for households and businesses, which have faced successive hikes in electricity rates.

For consumers, the idea of using operational profits to pay employee bonuses feels like a betrayal. “If there is money for bonuses, then there should be money to lower tariffs. Otherwise, it seems like the public is footing the bill for inefficiencies they had no part in creating,” one consumer remarked.

The impact of historical losses 

A senior engineer at the CEB, who requested anonymity, offered a different perspective. The engineer pointed out that employees were not to blame for the board’s historical losses. Instead, systemic failures, policy missteps, and external pressures have been the primary culprits.

“The main reason for the CEB’s struggles has been the delay in adopting a cost-reflective tariff mechanism. The Public Utilities Commission of Sri Lanka (PUCSL) repeatedly opposed this until the International Monetary Fund (IMF) intervened. As a result, we incurred massive losses for years,” the engineer explained.

The engineer also highlighted the lack of investment in low-cost power plants as a key issue. “For over a decade, there has been opposition to introducing efficient, low-cost power generation. This has kept our electricity generation costs high. Employees cannot be blamed for decisions made by policymakers and management.”

Moreover, they pointed to the alarming rate of employee attrition as a pressing concern. Over 200 engineers have left the CEB in the past two years, many for better opportunities abroad or in the private sector. 

“We’ve lost skilled professionals because the work environment and benefits are no longer appealing. Without adequate incentives, this trend will only worsen,” the engineer warned.

Bonus or tariff cuts?

Despite the claims of profitability, the CEB’s financial situation remains precarious. According to official data, the board is grappling with debts exceeding Rs. 100 billion. The Ministry of Energy has been clear that bonuses are unlikely for the foreseeable future.

Speaking to The Sunday Morning, Energy Ministry Secretary Prof. K.T.M. Udayanga Hemapala stated: “As a policy, we cannot approve bonuses while the CEB is burdened with such massive debts. If there is a profit, the first priority should be reducing tariffs for the benefit of the general public.”

Prof. Hemapala further explained that while the board had achieved operational profits due to cost-reflective tariffs, these funds were insufficient to cover existing loans and committed payments. “We are in discussions to restructure the board’s debts, but until that is resolved, bonuses cannot be a priority,” he added.

A closer look at the CEB’s operational data reveals the complex dynamics of Sri Lanka’s electricity sector. The board’s total installed capacity stood at 4,381 MW at the end of 2023, with major hydropower plants accounting for 32% of the total. Non-conventional renewable energy sources, including wind, solar, and biomass, contributed 20%.

However, reliance on thermal generation remains significant. Liquid fuel consumption for thermal power increased by 50% in 2023, with the Lakvijaya Power Plant alone consuming nearly 1.9 billion kg of coal. The rising cost of fuel, both domestically and globally, pushed the CEB’s total fuel expenditure to Rs. 278 billion – a 37% increase compared to the previous year.

On the revenue side, the board recorded a 97% increase in billed electricity sales, generating Rs. 606 billion in 2023. This surge is attributed to multiple tariff hikes throughout the year. Despite this, electricity sales volumes have declined, particularly in the domestic and religious categories, reflecting the financial strain on consumers.

CEB Spokesman Eng. Dhanushka Parakramasinghe stated that discussions regarding employee bonuses were ongoing but no final decision had been made. He stressed that the management was considering all factors before arriving at a conclusion, including financial commitments, public sentiment, and employee welfare.