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Kenya Power drops plan to lay off staff

Kenya Power to lay off staff in new business review

Kenya Power and Lighting Company (KPLC) has rescinded its plan to lay off staff hardly a day after it publicly announced to send home an unspecified number of its 10, 481 workforce.

The company said it is rather optimising staff compliment with an aim to enhancing productivity and representativeness to customer issues.

“A recent tender document inviting bids from interested consultants indicated that the Company was planning to lay off staff members as part of this process. However, I would like to assure you that the Company has no plans to lay off any staff member,” said Benard Ngugi, KPLC’s Chief Executive Officer in a statement.

The power distributor had earlier on claimed that the move to lay off its staff was informed by its current financial woes which have affected its ability to run sustainably and deliver services to the public.

The restructuring plan was to include reduction of debts, electricity theft and strategy for renegotiating bulk power purchases from firms.

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Kenya Power’s salaries and wages rose by 9.1 percent to Ksh.17.4 billion in the year ended June 2020 when its workforce shrank to 10,481 from 10,914 the year before.

Administration expenses rose by Ksh.5.6 billion to Ksh.26.7 billion, plunging the company into a Ksh.939.4 million loss in the review period.

KPLC also suffers from poor sales collection, theft of electricity and defaults by big customers, including government ministries.

The company is seeking financiers offering both lower rates and longer loan life, adding that the value of the loans that will ultimately be refinanced will depend on the offers received.

Some of the loans have fixed interest rates, meaning the utility has not benefited from the recent drop in the base rate to below one percent.

Kenya Power’s current lenders include Standard Chartered Plc whose total outstanding loans as of June 2020 was Ksh.39.3 billion, Rand Merchant Bank (Ksh.2.4 billion) and Equity Bank (Ksh.4.9 billion).

The electricity distributor’s troubles have sucked in key constituents, including suppliers like KenGen, which has not been paid some Ksh.24 billion.

The company also wants to reduce collection losses by between two to three percent starting with the largest debtors and the public sector.

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Lawrence Baraza is a prolific writer with competencies in Digital Media, Print, and Broadcast. Baraza is also a Communication Practitioner currently spearheading Digital content on Metropol TV's Digital Desk.

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