ECONOMYNEXT- Engineers of state-run power monopoly has warned that un-bundled firms may not be able to operate due lack information allocate assets, liabilities, cashflows and operational plans in a Preliminary Transfer Plan (PTP) that has been approved by the Finance Ministry.
When the utility is separated in to generation and transmission companies, there was no information the PTP on how to allocate assets and liabilities including loans that may have to be split between the two entities and separately serviced, the CEB Engineers Union said in a letter to a parliamentary panel.
For generation company to repay loans, cash has to flow from distribution company through Power Purchase Agreements.
There were no information on how the generation, transmission and national system operator was supposed to run and interact with each other operationally, the letter said.
Many clauses in the law, violate the law, CEBEU said.
There was no information on a “financial plan for the successor companies, including the financial liabilities and existing debt allocation, inter-company account reconciliation (identification of receivables and payables), and identification of other financial obligations(designated and common), and the details about the inventories and stocks of entities.
“There are no details regarding the allocation and preliminary valuation of assets,including land, buildings, plants, machinery, and other movable assets, to the successor companies, carried out through an asset valuation by the chief valuer of the assets owned by CEB, in clear violation of Section 39.1(b).
“No operational agreements between companies, no details about the power purchase agreements, transmission service agreement, power supply agreements, draft licenses for NSO and NTNSP, and functional assurance for service continuation, in violation of Section 18.2, Section 10.14, Section 14.2, and Section 14.4 of the Act.”
The PTP was also silent on the provident fund of workers, the letter said.
The full statement is reproduced below:
Ms. Chula Herath, The Secretary,
Sectoral Oversight Committee on Infrastructure and Strategic Development, Parliament of the Democratic Socialist Republic of Sri Lanka.
Dear Madam,
Request for the Intervention of the Sectoral Oversight Committee on Infrastructure and Strategic Development regarding the Ongoing Electricity Sector Reforms
This is further to our letter addressed to you, CEBEU/25_26/Gen/28 dated October 07, 2025, regarding the same subject.
As written in the aforementioned letter, the CEB Engineers’ Union (CEBEU) profoundly wanted to bring to the attention of the Hon. Members of the Sectoral Oversight Committee on Infrastructure and Strategic Development a series of serious concerns regarding how the ongoing electricity sector reforms are currently being implemented in violation of the law, specifically the Sri Lanka Electricity Act No. 36 of 2024 and the Electricity (Amendment) Act No. 14 of 2025 and the best international practices.
While CEBEU has consistently provided professional support for a reform process of the electricity sector that is transparent, technically sound, and beneficial to the public, we regret to note that the current process has strayed from the principles of good governance, institutional accountability, and statutory compliance as outlined under the Act.
In addition to the eight (08) bullet points we referred to therein, CEBEU wishes to urgently bring to your attention a matter requiring immediate mediation. This concerns the issues related to the Preliminary Transfer Plan (PTP), which will serve as the referral and roadmap for the successor companies to commence operations on the day immediately after the appointed date related to the Electricity Sector Reform process.
As per the provisions of the Act, the PTP shall include all details concerning the vesting of activities of CEB related to the restructuring of generation, transmission, distribution, and supply of electricity, as well as a financial plan for the vesting of assets and liabilities, which will initially be required for the successor companies to commence operations.
Precisely, this document will determine the initial operations of the successor companies, which will take over the CEB immediately after the appointed date, ensuring a reliable and continuous power supply across the country, since the CEB will cease to exist after that date.
However, we were surprised to see a 10-page document titled ‘Draft Preliminary Transfer Plan’ (with 08 attached annexures) shared by the Secretary of the Ministry of Energy in his letter MOE/SEC/COM/2025 dated September 25, 2025 (Attachment 01), requesting circulation among the employees of CEB and inviting observations by October 01, 2025 (within 04 working days).
However, this draft was circulated only among selected management positions in CEB, not among the employees or trade unions, prior to October 01, 2025. This provided no opportunity for the employees and trade unions to comment on the inadequacy of this draft document.
However, we received further shocking information that the same ‘Draft Preliminary Transfer Plan’ had been forwarded to the Ministry of Finance for approval on the same day it was sent to CEB for comments, and the approval of the Minister of Finance has been given to this same draft by the letter PED/1/CEB/2/21(i) dated October 11, 2025(Attachment 02).
In light of these developments, we wish to mention the following,
1. In our opinion, the proposed draft PTP has been prepared in a gross violation of the provisions of the Act, as it has failed to comply with (but not limited to),
a. As per the provisions of Section 18.2 of the Act, the Transfer Plan, including the PTP, shall be prepared in accordance with the policy directions of the Minister of Energy, and there are no such directions mentioned or referred to in the draft PTP.
b. In violation of the provisions of Section 17.2, Section 18.2, Section 18.3(d), and Section 18.3(e) of the Act, although all activities, assets, liabilities, and the duties and functions of CEB are to be transferred to the successor companies (six in total) during the first stage of unbundling, only four companies have been incorporated so far.
The company, as the trustee and custodian of CEB’s pension fund and provident fund, along with the residual company, are yet to be incorporated, and nothing has been mentioned about the activities, assets, liabilities, and the duties and functions of CEB to be transferred to those two companies in the draft PTP.
c. Disregarding the provisions of Section 17.2, Section 18.3(d) and 18.3(e), no mechanism has been outlined for the pension fund and provident fund contributions from the other successor companies to the company of the trustee and the custodian of the pension fund and provident fund of CEB.
d. In violation of Section 18.3(d) and 18.3(e), no efforts are being made to securethe necessary approvals for transferring the pension fund and provident fund of CEB, as it requires a series of approvals.
e. In violation of Section 18.2(a) and Section 18.3(b), no details about a detailed financial plan for the successor companies, including the financial liabilities and existing debt allocation, inter-company account reconciliation (identification of receivables and payables), and identification of other financial obligations(designated and common), and the details about the inventories and stocks of
entities.
f. There are no details regarding the allocation and preliminary valuation of assets,including land, buildings, plants, machinery, and other movable assets, to the successor companies, carried out through an asset valuation by the chief valuer of the assets owned by CEB, in clear violation of Section 39.1(b).
g. No operational agreements between companies, no details about the power purchase agreements, transmission service agreement, power supply agreements, draft licenses for NSO and NTNSP, and functional assurance for service continuation, in violation of Section 18.2, Section 10.14, Section 14.2, and Section 14.4 of the Act.
h. No details are provided for the contractual commitments, which CEB has entered into in violation of Section 18.2 and Section 39.1(f).
i. Nothing has been mentioned about the commencement of the operation of successor companies after the appointed date, and any problem-solving mechanism in violation of Section 18.1 of the Act.
2. Furthermore, an internal transfer mechanism for CEB employees was initiated within the CEB under the leadership of PSRS a few weeks prior to the issuance of the notice of assignation, and nothing has been mentioned about the transfer-eligible employees (approximately 900) between the successor companies in this PTP (Attachment 03).
3. The Secretary to the Ministry of Energy shared this PTP on 25th September for comments from CEB, but this draft was circulated only among selected management positions within CEB, providing no opportunities for CEB employees or trade unions to comment.
4. The same draft PTP was forwarded to the Ministry of Finance for approval on the same day it was sent to CEB for comments by the Secretary to the Ministry of Energy, and the approval of the Minister of Finance has been given to this same draft, without validating it for compliance with the provisions of the Act.
5. The approval letter from the Ministry of Finance has instructed the Secretary to the Ministry of Energy to obtain the approval of the Ministers of the Cabinet for this document.
6. There has been no stakeholder consultation conducted with respect to this purported draft PTP, and we firmly believe that, if this plan were to be implemented, the entire electricity sector of the country could collapse — not because of the employees of the CEB, but entirely due to the Ministry’s reckless and irresponsible handling of the process.
In view of the above, we respectfully request that the Sectoral Oversight Committee on Infrastructure and Strategic Development urgently review the ongoing electricity sector reform process, summon the relevant officials for clarification, and ensure that the reforms are implemented in strict accordance with the law, established procedures, and the principles of
transparency, equity, and accountability.
We further request that the Committee provide an opportunity for the Ceylon Electricity Board Engineers’ Union (CEBEU) to present its professional observations and proposals before the Committee, so that Parliament is fully apprised of the practical and legal issues currently threatening the success of this nationally significant reform program.
Furthermore, we believe that only through proper dialogue and consultation can we effectively address the serious issues in the PTP and the entire transition process, ensuring that there is no room for error, ambiguity, or future legal and operational challenges in its implementation, after the appointed date.
Please recognize that all these efforts are made by CEBEU in good faith and with genuine intent to guide the reform process in the right d
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