Kenya Power workers get Sh2 billion pay rise

Employees of electricity distributor Kenya Power #ticker:KPLC earned an extra Sh2.2 billion in salaries and wages last year, representing a 17.1 per cent pay increase in a period when the company’s profit remained nearly flat.

Kenya Power’s annual payroll of Sh14.9 billion represents an average monthly salary of Sh110,233 for each of the utility’s firm’s 11,295 workers.

Senior managers, however, ordinarily earn multiple times what the lower-cadre employees receive.  

The power distributor’s staff count increased by 162, or 1.5 per cent, which is significantly lower than the jump in total earnings.

The disclosures, contained in the NSE-listed firm’s latest annual report, attribute the disproportionate jump in wages to salary reviews implemented for management and unionisable staff.

“To motivate and harness the potential of human capital in the business, management implemented salary reviews for management staff following approval from the Salaries and Remuneration Commission,” says Kenya Power.

“Union-represented employees had their terms also reviewed following implementation of a new Collective Bargaining Agreement (CBA).”

Kenya Power’s average employee salary is, however, lower than that of its counterpart in the energy industry, KenGen, whose Sh6.9 billion wage bill equals an average of Sh233,443 for each of its 2,476 workers.

Kenya Power’s revised CBA with its unionisable employees under the Kenya Electrical Trades and Allied Workers Union is effective until 2021.

The CBA was signed after an intense battle between the union and the power firm, culminating in a disagreement which was adjudicated in court.

Management staff who met or surpassed the targets set out in their performance contracts, which the power firm says are reviewed periodically, were also rewarded during the year.

The windfall being enjoyed by Kenya Power staff came in the same period when the utility firm’s net profit grew by one per cent to Sh7.27 billion on increased transmission and distribution costs.

The firm, which is owned 50.08 per cent by the Treasury, has also made the significant pay adjustments at a time when the government is keen on reeling in the wage bill which crossed the Sh500 billion mark in 2014.

The improved remuneration for Kenya Power staff also comes against the backdrop of several companies shutting down over the past five years on account of high operating costs, citing especially electricity bills.

Kenya Power’s expenses, including its staff costs, are just one component of customers’ electricity bills, which are mainly determined by the cost of producing the energy.

READ: Kenya Power signs on IFC plan to curb electricity leakages

The utility firm’s customer ratio improved from one employee for every 439 electricity customers in 2016 to one employee per 547 customers in the period under review.

“Our employee sourcing and retention strategy includes offering competitive remuneration packages, tailored skills development and capacity building, recognition and reward programmes,” the power distributor says.

“Their performance was reviewed periodically and measures put in place to enhance productivity. To promote performance excellence, employees who delivered in their performance contracts were recognised during the year.”

Kenya Power has widened its customer base to 6.3 million, a six-fold growth from one million in 2010, powered by the government’s Last Mile connectivity project where homes are connected to the national grid at a subsidised cost of Sh15,000.

The company’s total revenue was up 11 per cent to Sh120.7 billion in the year to June 2017.