Sri Lanka's CEB Restructure: Why Four "Private" Companies?
The Sri Lanka Electricity Board (CEB) is undergoing a major government-led restructure. For better management, the CEB's functions will be split into four independent, government-owned private limited companies.
This move has sparked a lot of debate, with many people assuming that the use of the word "private" means the CEB will be sold off. But is that true? Let's break down what's really happening.
The New Structure of the CEB
The restructuring will create four new entities, each with a specific role:
Electricity Generation Lanka (Private) Limited: This company will handle the generation of electricity.
National Transmission Network Service Provider (Private) Limited: This entity will manage the country's entire power transmission system.
Electricity Distribution Lanka (Private) Limited: This company will be responsible for distributing electricity to consumers.
National System Operator (Private) Limited: This entity will manage and control the entire electricity system.
What Does "Government-Owned Private Company" Mean?
The term "limited liability company" is typically used for private sector businesses that aim to make a profit for their shareholders. So why is the government using this model for state institutions?
In Sri Lanka, most government bodies are created for public services, not for profit. However, there are a growing number of government-owned companies that are structured this way to achieve commercial goals.
Many people don't realize that this is not a new concept in Sri Lanka. Several successful government-owned private companies have been operating for years.
Why Restructure as a Private Company?
The government hopes to gain several key advantages by restructuring these state institutions:
Improved Efficiency: These new companies will be able to operate with more flexibility and better respond to market demands, leading to improved performance and asset management.
Attracting Investment: Structuring as a private company makes it easier to attract investments from the private sector and secure financing from banks.
Less Bureaucracy: They can operate more quickly and freely, without the red tape and bureaucratic limitations often found in traditional government departments.
Some might worry that these companies will act completely independently, but that's not the case. They will still be controlled by a government-appointed board of directors. Their operations, from hiring to procurement, must follow strict, pre-approved guidelines.
For example, all major projects and purchases will still require approval from a Cabinet Appointed Procurement Committee (CAPC), just like with any other government entity.
Real-World Examples in Sri Lanka
This restructuring model isn't just theoretical. It's already in practice with successful government-owned private companies.
Airport & Aviation Services Sri Lanka (Private) Limited: This company, which I have worked for over 30 years, was restructured from a government authority in 1983. In 2024, it reported an impressive annual revenue of Rs. 43.8 billion and an operating profit of Rs. 19.5 billion. It is a major contributor to the national treasury.
Milk Industries of Lanka (Private) Limited (MILCO)
These examples show that a state-owned private company can be both efficient and profitable while remaining under government control.
What's Next for the CEB?
The success of the CEB's restructuring will ultimately depend on the commitment and dedication of its new management and employees. The new structure provides the framework for efficiency, but the people behind it will make all the difference.
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