⚡ Tariff Dispute Stalls CEB Restructuring: Govt. Intervention Sought for Rs. 8.8 Bn VRS

The power sector reform process faces a significant funding gap as the regulator rejects passing Voluntary Retirement Scheme (VRS) costs onto consumers. • Funding Deadlock: The Ceylon Electricity Board (CEB) requires Rs. 8.83 Bn to compensate 2,010 employees opting for voluntary retirement. While the Cabinet initially approved recovering this via tariffs, the PUCSL and IMF have officially declined the inclusion of these costs in the 2026 tariff structure. • Reform Impact: The refusal leaves the CEB and its successor entities unable to secure loans for the VRS, threatening the timeline for broader energy sector restructuring and debt management. • Proposed Solution: The Energy Ministry has requested the Treasury to intervene by offsetting the Rs. 8.8 Bn cost against a separate Rs. 71.83 Bn legacy debt recovery stream already slated to be collected via tariffs over the next 15 years. • Context: These reforms are critical to Sri Lanka's IMF program, which aims to professionalize the utilities sector and reduce the fiscal burden of State-Owned Enterprises (SOEs) on the national budget.