The experience of Kenya power and lighting in Outsourcing line construction in coast region

Abstract

The purpose of this study was twofold: to establish whether KPLC has achieved improvement in performance by outsourcing line construction and; determine the challenges experienced by the firm in outsourcing this particular activity. The study was informed by the fact that outsourcing line construction was a new phenomenon in the energy sector and it was important to study whether there are improvements and challenges associated with outsourcing of this activity in the electrical energy subsector. Noteworthy, energy consumption and economic growth are interrelated (Stern, 2003). In order to study whether KPLC had achieved improvement in performance two null Hypotheses were tested: Null hypothesis H0: There is no difference in completion time between KPLC staff and the service providers and alternative Hypothesis H1: Service providers work faster than KPLC. The second null hypothesis H0: There is no difference in cost when line construction is done in house or by service provider while the alternative hypothesis H2: Service providers are cheaper for line construction. The hypotheses were tested using a one tailed t-test at 0.05 level of significance, for the categories of jobs selected. On the second objective, nine informants were interviewed to determine challenges experienced by KPLC on outsourcing of line construction. The findings revealed that not all the categories of jobs had registered significant change by outsourcing line construction; especially on completion time, there was no significant change between internal staff and service providers except for jobs involving 3 poles and within 0-20km. On cost comparison significant results were noted in four categories of outsourced jobs while two categories did not register significant change. On overall, the study showed that there is no difference in average completion time between KPLC staff and service providers in line construction. Also on costs, there is no cost difference between work done in house and when it is outsourced. Thus, the t-test failed to reject null hypotheses. The study further established that many challenges and risks exist in outsourcing line construction. Hence, KPLC management has to make bold decision on service providers to provide quality service in line construction. In order to attain required short completion time and optimum cost of doing the work, the study recommends that the management should put more effort in supervision of outsourced service providers involved in line construction.