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Kenya Power to lay off, move staff in turnaround strategy

NEWS
By Macharia Kamau | May 21st 2021
Kenya Power and Lighting Company's technical team at KPLC Huruma Sub-station, Nairobi. [Jonah Onyango, Standard]

Kenya Power (KPLC) is set to lay off employees in a planned turnaround strategy that also seeks to push more staff from offices to the field in a bid to align its resources with its needs.

The company is searching for a consultancy firm to develop a comprehensive transformation strategy and, once it is approved by the board, assist in its implementation.

Among the areas of focus by the consultant, Kenya Power said, would be a strategy on a gradual reduction in its workforce. The firm currently employs over 10,000 people.

“The transformation strategy will be focused on the value creation levers and will comprise of… phased reduction in workforce to ensure KPLC remains competitive and provides the right levels of service, and bring this into line with best benchmarks in Sub-Saharan Africa,” said Kenya Power in a document published on its website.

The electricity distributor recently experienced a reduction in employees to 10,479 in the financial year to June 2020, from a high of 11,295 in 2017.

It has also been undertaking a restructuring, which has seen it deploy “extra workforce drawn from office-based staff countywide to enhance our field presence”.

This is aimed at enabling a focus to customers as well as seal revenue leaks attributed to different factors, including illegal connections.

Increasing field staff is expected to help the firm in its new county-focused strategy, in which it has transformed counties into business units.

Kenya Power said the consultant will factor in the ongoing efforts to turn around the company in the transformation strategy.

Other areas that the strategy seeks to address include the government’s Last Mile Connectivity Project, which has to an extent been a drain to the firm.

The project, which has been pushing universal electricity access and hooks up homes to power as long as they are within a 600-metre radius from a transformer, has in the past been partly blamed for the company’s financial woes.

Kenya Power now hopes the consultancy can develop a strategy that will “resolve the financing of ongoing rollout and maintenance of last-mile electrification” including how to “immediately ring-fence and take off-balance-sheet if possible”.

It also said another role for the consultant will be to come up with a strategy for the renegotiation of power purchase agreements (PPAs).

The PPAs with power producers have been a key concern for the company, with many of them requiring payment even when the producers have not fed power to the electricity grid.

The structure of the agreements are such a concern, particularly their impact on the cost of power, that President Uhuru Kenyatta recently formed a task force to look into the contracts.

Kenya Power also hopes the transformation strategy will chart a way to reduce electricity losses to between 10 and 12 per cent.

System losses have been on the rise, standing at 23.5 per cent in the year to June 2020 from 18.7 per cent in June 2017.

 

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