State-owned utility firm Fenaka Corporation Limited can cut down on costs to minimise reliance on government funds to manage its operations, the company’s new Managing Director, Mohamed Najah has said.
In an exclusive interview with PSM, the debt-laden company’s new Managing Director said the government was aiding efforts to minimise Fenaka’s debt burden. However, Najah insisted that Fenaka cannot continue to rely on government bailouts and subsidies to fund its operations. He alluded to ongoing efforts to cut down on operational costs through reforms of the company’s procurement policy.
"We have already started a special project to streamline our procurement system. We are looking at reducing the company's costs by 40 percent through the procurement reforms alone,” Najah said.
In addition to procurement, Najah said efforts are also underway to streamline human resources and recruitment policy in a bid to strengthen corporate governance. However, he was quick to insist that the efforts to structure governance would not lead to mass layoffs. According to Najah, Fenaka is also looking at ways to minimise its rather significant fuel costs.
"As far as I know, there have been several incidents of major theft from fuel. So to prevent that, we have started a project to reduce or eliminate theft of fuel through more oversight of staff at the refilling stations, checking the fuel refilling system and using the latest technology,” he explained.
“We cut USD518,000 from fuel costs last month and we will reduce it even more this month.”
Najah said Feneka’s primary aim is to strengthen its operations, pay off debts and expand its services. Once achieved, Fenaka can finally become self-sufficient and complete the projects that have been stalled due to financial difficulties, he added.
Poor management and unnecessary staff recruitment in successive governments had compounded the company’s financial distress.