KESC has graver issues to deal with

The throwing of stones at KESCs offices yesterday was clearly unacceptable. Yet it was inevitable.
Before rebuking the KESCs management for firing no less than 4000 employees on the expiry of VSS acceptance date, the critics should keep in mind that the struggling power provider is no more a public sector entity. Being a private firm, it has all the rights to make decisions that it deems commercially viable.
Still, the protest, which later turned into a violent gathering resulting into physical property damage, could have been averted or at the least minimised, as the KESC should have been aware of the backlash. The labour unions think that the episode is far from over and the matter is all set to go into litigations, but it seems that the KESC has the bases covered this time.
The question then arises as to why did only 500 employees opt for the VSS when they were sure that non-compliance would result in immediate retrenchment by the company.
The answer probably lies in the labour unions, which assured the employees, most of them un-skilled and from the lower level, of their support in such a case. Whether the union now be able to help reinstate the employees is a tough question, but some circles believe it may at least succeed in making the 4000 sacked eligible for the VSS.
Yet, while the decision to axe 4000 employees may not be questioned, the rationale behind it surely lacks clarity. "The KESC believes that this strategic move will significantly improve the operational performance of the company," reads the company press release.
Although, the company has not given any numbers, KESC would approximately save no more than Rs500 million annually on the salaries and wages account based on rough calculations. Since this makes around 5 percent of the firms average annual salaries expense, it is clearly not a significant operational improvement.
Surely the KESC has other problems to address, which hinder its performance more than lower grade employees sacked by the company. The firm still runs high T&D losses of 35 percent that cost the company roughly Rs35 billion annually on the revenue account. Then the inefficiency in the bills collection procedure yields in liquidity problems, which are the starting point of the circular debt.
The leakage in billing collection also augments the firms finance cost. These numbers certainly contribute more significantly to the overall losses than the wages of these employees who were mostly engaged in clerical level jobs.
While the decision should be viewed as one made in rationalising the human resource by a commercial entity, it still raises doubts over how the firm means to solve the bigger issues at hand.
Certainly, resolving the menace of electricity theft and transmission losses is of more significance than annoying thousand of employees who were not a major cause of the problem, and the sacking of whom may not yield groundbreaking results for the weak power supplier.