Concerns have been raised regarding the decision to increase salaries and hire additional staff at the State-owned Ceylon Electricity Board (CEB) and Ceylon Petroleum Corporation (CPC), which have been incurring losses.
These institutions, which have contributed to significant financial losses due to alleged mismanagement, have shifted the burden onto consumers through higher electricity tariffs and fuel prices.
A key concern now is whether these institutions can justify the allocation of millions of rupees for staffing costs while relying on taxpayer money, especially given their financial challenges.
Misplaced Govt. priorities
Samantha Perera, a 32-year-old IT expert based in Colombo, remarked: “When a privately owned IT company faces losses and struggles to operate, it usually starts by downsizing its workforce, freezing increments, and cutting other employee perks. In contrast, State institutions often handle financial difficulties by passing the burden onto consumers while continuing their usual practices.
“The ongoing economic crisis has severely impacted numerous private companies, leading many to shut down, and recovery remains elusive. Private sector employees rarely see salary increases unless they work for exceptionally high-performing companies. Yet, as soon as elections are announced, State employees often receive salary hikes.”
He stressed that the Government should prioritise reducing taxes, tariffs, and prices before considering salary increases for State employees. “Power and Energy Minister Kanchana Wijesekera initially promised reforms for these institutions, but the current situation is farcical. It seems that politicians never learn, and the public temporarily lapses into misplaced trust, hoping for real change,” he added.
Ongoing salary hikes and recruitment
As reported by The Sunday Morning last week, the Ministry of Power and Energy has proposed a 25% salary increase for CEB employees, costing Rs. 750 million. This proposal, reviewed by the Cabinet, is now under the review of the Finance Ministry. The Cabinet will decide whether the Rs. 10,000 promised by the Government will be included in this increase or provided separately.
Meanwhile, as reported, the CPC has approved the outsourcing of 20 security officers from Rakna Arakshaka Lanka Ltd. (RALL) for refuelling activities at Katunayake. The CPC has requested these officers for six months to avoid delays and ensure a timely procurement process.
Despite having 200 vacancies for security officers, the CPC is downsizing and has frozen hiring. The cost of these additional officers, totalling Rs. 13.35 million for six months, will be reimbursed by the CPC. Neither the CPC nor the Ceylon Petroleum and Storage Terminals Ltd. (CPSTL) will be involved in selecting the RAL personnel.
TU concerns
Nevertheless, these proposals and approvals have been criticised by the Trade Unions (TUs) attached to the two institutions.
Raising concerns about the recent recruitment plan, Ceylon Petroleum Common Workers’ Union (CPCWU) President Ashoka Ranwala said: “There were no existing vacancies for new hires at the Katunayake facility. The abrupt decision to outsource security officers has sparked significant unrest among employees. There is growing speculation that this move is part of a broader strategy to transfer operations at the Katunayake aviation division to RAL.”
Ranwala elaborated: “This situation has created anxiety among the workforce, who fear that the Government may be preparing to privatise or outsource key operations that were previously managed in-house. Such a shift could undermine job security and impact the quality of service. We are concerned that this outsourcing could be a precursor to larger, more disruptive changes within the organisation.”
He further stressed: “The lack of transparency in the decision-making process is troubling. Employees deserve clear communication about the motives behind these moves and how they will affect their jobs and the organisation’s operations. We urge the Government to address these concerns and ensure that any changes are made with proper justification and consideration for the workforce.”
Meanwhile, Lanka Viduli Sevaka Sangamaya (LVSS) President Ranjan Jayalal expressed frustration over the significant delay in implementing a long-awaited salary increase for employees of the CEB. Jayalal revealed that the promised salary hike, which was initially scheduled to take effect in January this year, had been postponed by nine months.
“The delay in granting this salary increase is now approaching a full year, despite the fact that CEB employees have been waiting for it for three years,” Jayalal stated. He emphasised that the salary adjustment had been due in January but was yet to be realised.
Jayalal further explained that the delay was particularly disappointing given the current financial status of the CEB. “The CEB has resolved its debt issues and cleared all outstanding loans. With the board now in a stable financial position, it is fully capable of implementing the promised salary increase,” he noted.
CPC, CEB response
Speaking to The Sunday Morning, CPC Chairman Saliya Wickramasuriya said: “The proposal doesn’t need to go to Cabinet. It was approved by the Election Commission. It should be noted that we are not recruiting; we are simply expanding the manpower contract by 20 – from 52 to 72 – for six months.
“We don’t know who will be assigned to the contract by RAL and we don’t care. The CPC will reimburse CPSTL the incremental cost, since the requirement is theirs, but the entity with the active contract is the CPSTL.”
Meanwhile, the Treasury has directed the CEB to develop a restructuring plan for its Rs. 673.4 billion in legacy debts, which include Rs. 412.1 billion in accumulated losses from 2013 to 2023. Despite high losses, including Rs. 203.5 billion in 2022, the precise method for restructuring remains undecided.
Power and Energy Ministry Secretary Dr. Sulakshana Jayawardena recently stated that the focus would be on legacy debts, while other debts were serviced regularly. The CEB faces Rs. 359 billion in payable balances and significant bank loans.
According to the Sri Lanka Electricity Act No.36 of 2024, some CEB liabilities will transfer to a new Government entity for hydropower, with other assets and liabilities allocated to successor companies.
However, when contacted, a senior official attached to the CEB stressed that a final decision was yet to be made on the debt transfer and that the CEB would continue to be operated as at present for only around 10 months, after which the National System Operator (NSO) would be in operation.
Nevertheless, the CEB is yet to take a decision on the workforce. The Sunday Morning also reliably learns that a final decision is yet to be made on CPC restructuring as well.
Meanwhile, State-Owned Enterprise Restructuring Unit (SOERU) Head Suresh Shah clarified that the CPC and the CEB were not under the purview of the SOERU. He explained that the restructuring of these entities was being managed directly by the Ministry of Power and Energy.
Despite Shah’s comments, attempts to obtain further details from the Ministry of Power and Energy including from its Secretary Dr. Sulakshana Jayawardena and Treasury Deputy Secretary R.M.P. Rathnayake were unsuccessful.