RK’s Security Services says it will be forced to pull its guards from government locations in the interior regions from next month due to the loss it is suffering as a result of the implementation of the new statutory minimum wage for private workers.
According to Chief Executive Officer Roshan Khan, the company is currently losing around $1 million per month and it would be unable to continue to execute the contracts for security services in regions 1, 7, 8 and 9 unless the government can pay the difference resulting from the minimum wage increase, which became effective from January.
In 2013, under the former government, the company had terminated a number of security contracts after a new minimum wage order was instituted mid-year and the then administration failed to raise the contract amount after he gave notice that the firm would suffer as a result.
At a press conference on Thursday, Khan said he welcomed the new minimum wage increase as well as its implementation from the start of the year, for which he commended the government. However, he said with the increased labour cost, the rates being paid by government would also have to be increased.
“It has come to the point that we cannot continue anymore,” he said. “For the month of January and February, our company has lost with the rate that we are charging,” he added, while noting that the decision to pull out would be difficult but he would have no other choice unless the government pays the difference.
Khan lamented that about 340 of his workers could be out of jobs in those interior locations if he decides to pull his services and he noted that it could create social problems. He added that while he was advised to pull his services as soon as the new minimum wage rate became effective, he did not do so because he did not want to create a security crisis.
Khan noted that he had written to President David Granger on the situation and the president indicated that he would forward his concerns to the ministers of Social Protection, Business and Public Security. However, he said, he had received no response up to last Thursday.
He also mentioned that he had made attempts to contact the Minister of Communities but promises by that office to get back to him on the matter have not been fulfilled.
He noted that his firm currently provides security services at government properties in the interior such as hospitals, health centres, schools, and doctor’s quarters.
He noted the similar situation under the previous government, which ended up replacing his firm with another that charged far more that what he was asking for. Khan said he was afraid that this mighty happen again under this current administration and hoped they could resolve the issue.
Khan charged that other firms can afford to tender below cost because they withhold statutory payments, such as contributions to the National Insurance Scheme. He said his company has never engaged in such practices and usually bids as low as possible while keeping its head above water.
