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Lakhra coal power plant to offer voluntary exit scheme to employees

By Javed Mirza
September 21, 2019

KARACHI: Lakhra Power Generation Company is mulling voluntary separation scheme (VSS) for its surplus employees as the government stepped up efforts to shed fiscal losses from state-owned companies through their privatisation or restructuring, The News learnt on Friday.

Lakhra Power Generation Company – the only coal-fired power plant in public sector – has invited expression of interest from consultancy firms to begin VSS for its 333 surplus employees ranging from BPS-1 to BPS-20 under the instructions from the ministry of energy, a document said.

“Government is devising a mechanism for voluntary separation scheme of surplus employees in state-owned generation companies as an option in consultation will all the stakeholders,” the document said.

Lakhra power plant (Genco-IV), the only coal-fired power plant in the public sector, was commissioned in 1995. Lakhra Power Complex consists of three units of 50 megawatts each with total installed capacity of 150MW. Located in district Jamshoro, about 60 kilometres from Hyderabad and 217km from Karachi city, the plants use coal of Lakhra coal mines.

Voluntary separation scheme is a scheme where employees are allowed to resign voluntarily from an organisation by receiving fair compensation. The purpose of organisations implementing VSS is to reduce the headcount of employees working in the organisations so that the overhead cost especially employment cost can be reduced.

Genco-IV is seeking a firm with demonstrable and proven capability of undertaking, managing and executing similar assignments.

Lakhra power plant posted a net loss of Rs905.372 million for the year ended June 30, 2017 as against loss of Rs347.39 million in 2016. The Ministry of Energy has initiated a right-sizing exercise in the overstaffed power generation companies (Gencos).

Lakhra is not in the active list of privatisation program. However, Central Power Generation Company Ltd (GENCO-II) and Northern Power Generation Company Ltd –NPGCL (GENCO-III) are included in the active list. There are at least 13 public sector enterprises included in the list. The government has also planned to introduce the voluntary separation scheme for the employees of Pakistan International Airlines (PIA), which has surplus staff – one of the reasons for losses in the national flag carrier.

The aviation division submitted a strategic business plan for PIA to the Prime Minister Imran Khan on April 4, 2019. The premier approved, in principle, the liquidity requirement for mark-up payments as well as the VSS plan and directed the finance division to take further necessary action.