- Government has initiated various policy and institutional reforms aimed at revitalising the corporation.
- The overall objective of the restructuring is to make PCK self-reliant
Image: FILE
The National Treasury has approved the disbursement of Sh810 million to the Postal Corporation of Kenya (PCK) to pay salaries for staff who have gone for six months without pay.
Broadcast and Telecommunications PS Esther Koimett on Tuesday told National Assembly’s Departmental Committee on Labour and Social Welfare said the funds will be used to pay salaries and is expected to clear all arrears.
She said the government is aware of the financial status of PCK and has initiated various policy and institutional reforms aimed at revitalising the corporation.
“The changing global market trends and emerging technology has adversely affected the traditional postal mail business,” she said.
She cited the rapid conversion to digital communications, the courier sub-sector, high cost of infrastructure, and the heavy public mandate of providing universal postal services to all citizens as the main threats to the survival of PCK.
Koimett said the financial challenges had made PCK reduce its outlets from, 1, 039 in 1999 to the current 623.
“The failure by PCK to embrace the changes fast enough to withstand the new developments in the sector has affected its revenue and operations,” she added.
She noted that the ministry wrote to the National Treasury to inject funds into the corporation as a stop gap measure to mitigate the effects of the Covid-19 pandemic.
She further noted that the ministry has initiated a restructuring process where a transformation strategy and a Cabinet memorandum as being prepared.
“The main objective is to make PCK a major player in the emerging e-commerce business,” she added.
Wajir MP Rashid Kassim had presented a public petition on salary arrears for staff. The petition noted that the corporation had consistently posted a deficit over the last five years which had been aggravated by the Covid-19 pandemic.
The petitioners asked the ICT Cabinet secretary Joe Mucheru to initiate a process of rescuing PCK from its financial woes.
Mucheru, who also appeared before the committee, said PCK is an important institution in the country that he could not watch as it goes down the drain.
“We want to embrace e-commerce business but the challenge is PCK has not had funds even for its critical obligations,” he said.
He noted that the corporation has a debt of about Sh6 billion owed to the government.
Kassim noted that PCK has 2541 employees who have been surviving without salaries. “If you look at how much these people support, the number is well over 10, 000,” he added.
Koimett said the overall objective of the restructuring is to make PCK self-reliant. “The intention is to make PCK not to rely on the tax-payer for salaries. We want to place PCK on a sustainable financial path,” she added.