Published On: Tue, May 27th, 2014

Aqualectra must adjust personnel costs – utility rate increase is not an option

AqualectraWILLEMSTAD – Aqualectra’s financial situation is very delicate and the company cannot allow itself to maintain the same level of personnel costs. In 2013, the utility company has performed various exercises to contain its other expenditures and try to increase its revenues (aggressive debt collection) without touching the personnel costs. Now it is time to take some drastic measures to save the company from bankruptcy.

The management team believes that it is necessary to cut into the personnel costs because an increase in utility rate is out of the question. Aqualectra indicates that the operation costs are part of the basic components, which were increased in January of this year and if the situation continues as it is now, there will be another increase soon in utility rates.

The management has opted for an open dialogue with the unions representing the 400 employees employed at the utility company. This is the management’s way of demonstrating respect to the employees, but also to assume its responsibility for the future of the company. According to the management, they hope that the unions can also assume their responsibility and be more open to the dialogue to try to save the company.

Aqualectra has budgeted about 100 million guilders in personnel costs, which is 18 million less than 2013. If the company is not able to adjust its expenditures, it will not exclude another utility rate increase.

Between 2010 and 2013, Aqualectra has lost 200 million guilders. Reason for this is because the rate correction was not done in a timely manner, which has put the company in a tough spot. To counteract these losses, the company has taken many drastic measures, especially in its operations.

 

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