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January 15, 2011

KESC to layoff over 4,000 workers next week

National

January 15, 2011

KARACHI: Karachi Electric Supply Company (KESC) plans to layoff over 4,000 workers next week as part of a cost-cutting drive to make the power utility financially viable, sources said on Friday.
The decision came after a voluntary separation scheme (VSS), announced by the management earlier this month, was turned down by most of the employees, they said. “Letters are being prepared and most likely the painful process of layoffs will start from Monday,” said a KESC official, requesting anonymity. “Employees did not opt for VSS as they see the deal unfavorable.”
With over 17,000 employees and runaway cost of fuel oil, KESC is struggling to run its operations smoothly. Perpetual disruptions in gas supplies also force the distributing company it to shut power plants every now and then.
In three months to September 2010, KESC reported a loss of Rs1.782 billion, lower than Rs5.615 billion incurred in the same period last year. Accumulated losses of KESC have crossed Rs81 billion.
A KESC spokesman refused to confirm or deny the sacking of the employees. The power utility, which was privatised in 2005 and has been under the control of Dubai-based Abraaj Capital since 2009, has seen its cost going up against the dwindling revenue amidst government-controlled tariffs.
“All of those being sacked are non-core workers. They are drivers, peons and others,” another official said. “We canít afford to remain overstaffed if KESC seeks a turnaround.”
Union leaders get most of their support from the 4,500 employees being fired, he said. “Management did not get a good response to VSS because of the interference of unions.”
Under the VSS, an employee was entitled to get between Rs0.7 million and Rs5 million, depending on the tenure of service.

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