KUWAIT: A possible pay dispute is brewing within Kuwait’s strategic oil sector, with Kuwait Petroleum Corporation (KPC) executives planning a freeze on salaries and the cancellation of economic incentives, bonuses and privileges and energy sector staff staunchly rejecting such ‘rationalization’ efforts.
Energy industry sources said that oil sector employee syndicates have refused initiatives that would jeopardize oil sector employees’ privileges and rights that had been guaranteed by the law and treaties stipulated in KPC’s subsidiary companies’ charts.
Notably, KPC’s executive administration had warned oil sector employees over the previous three days that the situation would be difficult if the rationalization initiatives, which cover both citizens and expat employees, were rejected and stressed that things were heading towards applying the payroll strategic alternative on both current and future employees.
The government and parliament are currently working on a project to overhaul the payroll system in the public sector. The ‘payroll strategic alternative’ would set unified standards for employees’ promotions, salaries, bonuses, indemnities and other rights and privileges at all ministries and state departments. Debate is still ongoing on wither to include the oil sector under the new system’s coverage. It is not clear exactly how the ‘payroll strategic alternative’ would impact salaries.
Temporary solutions
In a related statement, the Engineers Syndicate stressed that rationalization decisions were nothing but ‘temporary solutions’ for the economic crisis that had been exaggerated by both the state and KPC without setting any fundamental solutions to diversify sources of income and increase the state’s GDP.
However, in an escalation of the problems, the oil and petrochemicals employees’ union called for a rally for employees to be held at 6:00 pm on March 22 at the union’s headquarters. It explained in a statement that it would brief employees during the rally with the latest developments, discuss the best ways to fight and reject imposing the payroll strategic alternative project and express rejection of conditioned initiatives that affect employees’ rights and privileges.
Meanwhile, oil sources stressed that KPC adopts over 100 initiative to cut down expenses over the upcoming few years expecting to save around KD 370 million through cutting down energy consumption, reducing operational and consultancy expenses, restructuring contracts to get ones with better prices, providing high cash assets and doing away with non-profiting oil activities.
Further, the sources said that KPC would stop self-funding in coming years and mainly rely on mixed funding from banks. "Such steps had already been used in the clean fuel project as local and foreign banks will fund 70 per cent of its budget,” stressed the sources, noting that KPC plans to follow further 28 initiatives on the long run that are expected to save KD 727 million, especially since it had already succeeded in saving KD 270 million up till December 2015. —Al-Anbaa