Struggling Kenya Power is set to retrench a number of its workers in a bid to cut costs and return to profitability.
It is not yet clear how many employees are targeted in the power distributor, which currently employs over 10,000 in the country.
“Over the last four years, the company has experienced a general decline in its financial situation as depicted by reduced net earnings. In a bid to turn around and transform the financial performance of the company; improve efficiency and enhance customer experience, KPLC…[is eyeing] phased reduction in workforce to ensure KPLC remains competitive and provides the right levels of service,” said Kenya Power in documents quoted by Business Daily.
Kenya Power spent over 17.4 billion on salaries and wages in the year ended June 2020, despite the workforce shrinking from 10,914 to 10,481.
In the year that the company recorded a Ksh939.4 million loss, administration expenses rose by Ksh5.6 billion to Ksh26.7 billion.
In the six months to December 2020, Kenya Power’s finance costs more than doubled to Ksh8 billion from Ksh3.8 billion in a similar period in 2019.
Annual debt obligations for Kenya Power have hit Ksh20 billion.
Despite most of the connections yielding meagre income, there are fears that there was a lot of mismanagement in implementing them where costs were inflated.
To cover for its mounting financial woes, Kenya Power has floated an Expression of Interest (EOI) for refinancing of its Ksh54.6 commercial debt.
Kenya Power has been borrowing an average of Ksh7 billion in the last 15 years, a move that has ballooned its debt to Ksh109.9 billion as of June 2020 from Kshh4.1 billion in 2004.
Ksh56.6 billion is owed to commercial banks while Ksh53.2 billion is owed to other lenders, guaranteed by the Kenyan government.