Posta to shed 400 jobs with new land tender

The Postal Corporation of Kenya (PCK) has issued a fresh tender for buyers interested in its 5.03 acres of land in Kilimani, Nairobi.
The money raised from the sale will be used to pay final benefits for 400 workers the troubled corporation plans to retrench.

The parastatal had intended to sell the land to Indian telecom giant Bharti Airtel for Sh543 million to build its African headquarters, but the deal stalled after the Treasury and the Attorney General said the transaction would be illegal.

Attorney-General Githu Muigai advised against direct sale and pitched for a competitive bidding for the postal firm to be in step with rules set out in the Public Procurement and Disposal Act, 2005.

On Tuesday, the corporation published fresh tenders for the piece of land, which has six bungalows and servant quarters hoping to sell at a price higher than the Airtel offer amid increased investors’ interest in Kenya’s property market.

Information PS Bitange Ndemo said that part of the money would be used to lay off the employees to cut the corporation’s costs and keep it afloat in a business environment that has seen its core business of sending letters hit by new technology.

“The government had proposed to PCK to sell the land so that its proceeds could be used to pay off the workers it intends to retrench,” said Dr Ndemo, who also sits in its board.

The sale has split the board with Dr Ndemo saying the fresh tender should have sought the approval of the Treasury, adding that the Ministry of Finance had only given a go-ahead for the sale of the land to Airtel.

“The PCK management must seek another approval from the minister of Finance,” he said.

The parastatal has found it difficult to finance the layoff of some of the 4,000 employees it inherited from the defunct Kenya Posts and Telecommunications.

Besides the wage bill burden, the corporation is also weighed down by millions of shillings in debt owed to pensioners and other creditors.

It sacked 400 workers early last year as part of a restructuring plan aimed at pushing it back to profitability and cut wastage.

On Tuesday, Communication Workers Union of Kenya general secretary Benson Okwaro said that the corporation has not communicated the intention to lay off some of its employees.

“We have not received any such communication but we can’t rule it out,” said Mr Okwaro.

“The management should focus more on innovative strategies that can keep them afloat in the competitive sector rather than retrenching the workers.”

The workers’ union, which has 3,000 members drawn from PCK, was locked in legal battle with the company over the sacking of 550 workers who had gone on strike demanding a 30 per cent pay rise.