{"id":22539,"date":"2021-02-13T21:35:17","date_gmt":"2021-02-13T21:35:17","guid":{"rendered":"https:\/\/www.africa-press.net\/kenya\/?p=22539"},"modified":"2021-02-13T21:35:17","modified_gmt":"2021-02-13T21:35:17","slug":"mps-regulator-clash-over-sh1b-posta-bailout-plan","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/kenya\/economy\/mps-regulator-clash-over-sh1b-posta-bailout-plan","title":{"rendered":"MPs, regulator clash over Sh1b Posta bailout plan"},"content":{"rendered":"

AfricaPress-Kenya:<\/strong> The Communication Authority of Kenya (CA) and the National Assembly are at loggerheads over a proposal to inject Sh1 billion annually into the Postal Corporation of Kenya (PCK), dealing a blow to the efforts to revive the ailing parastatal.<\/p>\n

The National Assembly had recommended that CA injects Sh1 billion annually into PCK from proceeds of the Universal Service Fund (USF), the authority\u2019s kitty to finance network infrastructure development in marginalised areas.<\/p>\n

The proposals are contained in a report by Parliament\u2019s Labour and Social Welfare Committee, following hearings on PCK\u2019s failure to pay employee salaries between March and August last year.<\/p>\n

\u201cThe financial performance of the institution continued to decline given the adverse effects of Covid-19 as experienced in the economy,\u201d said the report. \u201cDisruption in logistics and supply chain systems adversely affected postal business on global mail conveyance that accounts for 60 per cent of the annual turnover.\u201d<\/p>\n

In a rejoinder, CA Acting Director General Ms Mercy Wanjau told The Standard that the proposal to pay out Sh1 billion annually from the USF was not tenable in the near-term.<\/p>\n

\u201cThe USF is a consultative project and we do plug in to support projects as needed across the ICT sector and this is a commitment we continue to make,\u201d she explained.<\/p>\n

Wanjau said the Sh1 billion annual payout was currently untenable and instead the corporation will be supported through a long-term plan.<\/p>\n

\u201cPCK needs support as a player in the communication sector yes, but we see it more as a long-term intervention and our five-year plan factors in this support,\u201d she said. \u201cWe are also going to enforce the requirement that PCK has exclusive rights to deliver letters below 350g which is currently not the case because of the influx of private courier operators.\u201d<\/p>\n

Last year, PCK\u2019s employees through the Communication Workers Union (COWU) wrote to the National Treasury and National Assembly to protest salary arrears, with the government eventually yielding to a Sh810 million bailout that was released in October.<\/p>\n

In the submissions made through COWU Secretary-General Benson Okwaro, PCK employees said the Postmaster General and board members are political appointees who serve their own interests and have abandoned their oversight role.<\/p>\n

\u201cIt has been difficult for PCK to do business for many reasons including lack of foresight by both the board and management to look outside the box and explore new horizons,\u201d says the report.<\/p>\n

PCK was also accused of using clients\u2019 money as opposed to only keeping the commissions, with clients like Kenya Power, Nairobi Water, Ministry of Labour and Absa Banklisted as having been affected.<\/p>\n

\u201cThe union was of the opinion that procurement of services by PCK should be checked,\u201d explains the report. \u201cFor example, PCK acquired the services of an enterprise resource planning (ERP) which to date is not complete and the computers serving the ERP are leased instead of being bought which is very expensive.\u201d<\/p>\n

The management was also accused of irregular leasing of PCK\u2019s prime properties across the country. \u201cPCK has many assets which include plots and buildings,\u201d states the report.<\/p>\n

\u201cThere is a new approach of leasing them out in a questionable manner e.g City Square, Kisumu plot, Naivasha Post Office, Tom Mboya Post Office.\u201d<\/p>\n

PCK management however defended the move to lease out its premises arguing that the corporation was experimenting with new revenue streams and avenues of reducing costs.<\/p>\n

\u201cWe signed agreements to lease the postal outlets to operators and this gives Kenyans an opportunity to run the post offices in a sort of franchise model and it also gives us more reach,\u201d explained postmaster Dan Kagwe during an interview last year. Mr Kagwe also said the salary arrears that necessitated the bailout from Treasury were occasioned by the Covid-19, and that PCK could still be a large player in the communications sector if given an annual cash injection of Sh1 billion.<\/p>\n

Parliament\u2019s Labour and Social Welfare Committee agreed that the Sh1 billion bailout was necessary alongside other policy reforms.<\/p>\n

\u201cPCK has the potential to turnaround and pay dividends to the exchequer by\u2026review of the policy on access to Universal Service Fund in support of the Universal Service Obligation by PCK,\u201d explains the committee\u2019s report in part.<\/p>\n

\u201cThe corporation urgently requires annual funding of Sh1 billion to support the non-profitable offices in line with revised National ICT Policy 2020.\u201d<\/p>\n

The committee recommended that PCK be incorporated in the newly formed Kenya Transport and Logistics Network to provide the last mile delivery from the railway and ports.<\/p>\n

\u201cThe government should appoint PCK as the preferred clearing and forwarding agent and logistics service provider, restore payment of the orphaned and vulnerable children and older persons stipend through the post and extend the installation of the National Optic Fibre Backbone to every postal outlet,\u201d says the report.<\/p>\n

The last public audit report on the parastatal dating back to the 2016\/2017 financial year paints a picture of an entity whose revenues have been declining as costs rise. According to the report, PCK made Sh2.5 billion in revenues for the 2016\/2017 financial year, down from Sh2.6 billion in 2015\/2016 and Sh3.3 billion in 2014\/2015.<\/p>\n

The bulk of the parastatal\u2019s revenues (65 per cent) is derived from mail business with 24 per cent from courier services. Five and six per cent of the revenues come from rent and financial agency services.<\/p>\n","protected":false},"excerpt":{"rendered":"

AfricaPress-Kenya: The Communication Authority of Kenya (CA) and the National Assembly are at loggerheads over a proposal to inject Sh1 billion annually into the Postal Corporation of Kenya (PCK), dealing a blow to the efforts to revive the ailing parastatal. The National Assembly had recommended that CA injects Sh1 billion annually into PCK from proceeds […]<\/p>\n","protected":false},"author":84,"featured_media":22529,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,8],"tags":[7472,7471,6024],"class_list":["post-22539","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-homepage-english","tag-ca","tag-communication-authority-of-kenya","tag-postal-corporation-of-kenya"],"yoast_head":"\nMPs, regulator clash over Sh1b Posta bailout plan - kenya<\/title>\n<meta name=\"description\" content=\"The Communication Authority of Kenya (CA) and the National Assembly are at loggerheads over a proposal to inject Sh1 billion annually\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/kenya\/economy\/mps-regulator-clash-over-sh1b-posta-bailout-plan\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"MPs, regulator clash over Sh1b Posta bailout plan\" \/>\n<meta property=\"og:description\" content=\"The Communication Authority of Kenya (CA) and the National Assembly are at loggerheads over a proposal to inject Sh1 billion annually\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/kenya\/economy\/mps-regulator-clash-over-sh1b-posta-bailout-plan\" \/>\n<meta property=\"og:site_name\" content=\"kenya\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2021-02-13T21:35:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/kenya\/sites\/28\/2021\/02\/mps_regulator_clash60280fe6965f9.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"660\" \/>\n\t<meta property=\"og:image:height\" content=\"419\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/economy\/mps-regulator-clash-over-sh1b-posta-bailout-plan#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/economy\/mps-regulator-clash-over-sh1b-posta-bailout-plan\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"MPs, regulator clash over Sh1b Posta bailout plan\",\"datePublished\":\"2021-02-13T21:35:17+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/economy\/mps-regulator-clash-over-sh1b-posta-bailout-plan\"},\"wordCount\":896,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/economy\/mps-regulator-clash-over-sh1b-posta-bailout-plan#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/kenya\/sites\/28\/2021\/02\/mps_regulator_clash60280fe6965f9.jpg\",\"keywords\":[\"CA\",\"Communication Authority of Kenya\",\"Postal Corporation of Kenya\"],\"articleSection\":[\"all news\",\"economy\",\"homepage-english\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/kenya\/economy\/mps-regulator-clash-over-sh1b-posta-bailout-plan#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/economy\/mps-regulator-clash-over-sh1b-posta-bailout-plan\",\"url\":\"https:\/\/www.africa-press.net\/kenya\/economy\/mps-regulator-clash-over-sh1b-posta-bailout-plan\",\"name\":\"MPs, regulator clash over Sh1b Posta bailout plan - 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