SLT in massive Rs 400 mln cost cutting exercise

By Bandula Sirimanna

The Sri Lanka Telecom (SLT) has launched a massive 400 million rupee cost cutting exercise in its operational activities claiming that the company will have to set off the potential losses, which will occur due to new tariff structure.

The SLT has made a post tax profit of Rs. 2.5 billion in the first half of this year after reversing an estimated amount of Rs. 875 million from its revenue. This came after considering the tariff reduction, in relation to the settlement of the Supreme Court appeal regarding the tariff revision implemented in 2003.

SLT employees and trade unions say that operational expenditure reduction measures have been taken by the company under the directions of Chief Executive Officer Shoji Takahashi at the expense of the work force as their overtime, duty allowance and travelling were curtailed to the maximum pushing them into economic hardships in addition to ever escalating cost of living burden. On the other hand they noted that SLT’s income would not be affected by the introduction of the new tariff structure. According to Takahashi, the time based tariff structure will help the company to be competitive in the market and with the introduction of the new system there could be an enhanced demand for SLT telephone connections. Issuing a circular No: 47 /2007, Takahashi has directed the Administration Division to reduce overtime of employees to a maximum of 50 hours, 100 hours per drivers and 30 percent on extra duty allowance. However SLT employees have accused the CEO for spending money lavishly for the benefit of himself and a selected group of top officials in spite of his own directive to reduce operational expenditure. One senior employee told The Sunday Times FT that the CEO has imported 3 Montero vehicles and one Camry car under his 50 million rupee allocation without the consent of the Board of Directors with a petrol allocation of 800 litres each to four chief officers.

This particular vehicle consumes 1 litre to run 4 km. The registration numbers of three Monteros valued at three million rupees each are KE 6824, KE6827, KE6829.The chairman of SLT is using a Volvo, a Nissan double cab and a jeep with unlimited fuel although the CEO has issued a directive to reduce fuel allocation by 10 percent, he said.

The software and small cable maintenance, advertising and sponsorships of Sri Lanka Telecom had been reduced by 230 million rupees under the operational expenditure reduction initiative.

Travelling allowance (local) was slashed by 50 million rupees while travelling/training overseas had been reduced by seven million rupees. SLT trade union leaders claimed that this action was taken by the CEO Telecom for the benefit of a handful of senior officials who were always fortunate to travel overseas for training and other purposes.