Jan. 21 (Bloomberg) -- Karachi Electric Supply Corp. workers set cars alight and pelted stones at the company’s offices after the supplier of power to Pakistan’s largest city fired 4,000 people on Jan. 19 to cut costs.
“We will sit in protest till they take them back,” said Mohammad Ikhlaq Khan, chairman of Karachi Electric’s workers union. “They fired 4,000 poor workers instead of cutting the heavy cost of management.”
Karachi Electric, which has struggled to make a profit after it was privatized in 2005, loses as much as one third of its revenue because of outdated meter-reading equipment, power theft and defunct transformers. The company lost 15.5 billion rupees ($180.5 million) in the year ended June 30. Last year, Karachi residents took to the streets to protest a record power outage lasting more than 42 hours.
“We had to reduce redundant jobs to make the company profitable,” Amir Abbasi, a spokesman for Karachi Electric, said in a phone interview today. “We offered a decent payout but only 500 people availed of it.”
Karachi Electric is owned by Abraaj Capital Ltd., a Dubai-based private equity investor, Pakistan’s Hasan Associates and Saudi Arabia’s Al-Jummaih Group.
The firings “were completely unlawful and against the privatization deal,” Khan said.
The utility’s shares, which have gained 11.7 percent this year, rose 5.4 percent to 3.14 rupees as of 12:29 p.m. local time on the Karachi Stock Exchange.
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