Companies

Posta needs Sh1bn yearly to keep branches open

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Posta’s CEO and Postmaster-General Dan Kagwe. FILE PHOTO | NMG

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Summary

  • PCK told Parliament that the Sh1 billion allocation will go towards meeting the corporations’ universal service obligation to Kenyans by ensuring the branches remain open.
  • The State corporation operates a vast network which currently stands at 623 post offices and partners with about 5,000 stamp vendor licensees across the country.
  • The State agency is also seeking approval to increase postage charges by up to 30 percent in the turnaround efforts.

The Postal Corporation of Kenya (PCK) is seeking Sh1 billion annually from the Treasury to keep loss making branches open across the country as it struggles to turn around its dwindling fortunes.

PCK told Parliament that the Sh1 billion allocation will go towards meeting the corporations’ universal service obligation to Kenyans by ensuring the branches remain open.

The State corporation operates a vast network which currently stands at 623 post offices and partners with about 5,000 stamp vendor licensees across the country.

“The corporation urgently requires an annual funding of Sh1 billion to support the non-profitable offices in line with revised national ICT policy 2020,” Dan Kagwe, the Postmaster General told the National Assembly’s Labour committee.

“The declining performance has necessitated submission of a petition to the National Treasury for bailout.”

The State agency is also seeking approval to increase postage charges by up to 30 percent in the turnaround efforts.

Under the revised rates that must get approval from the Communications Authority of Kenya, sending a letter weighing up to 20 grammes will increase to Sh110 from Sh85 reflecting a rise of 29.4 percent.

Letters weighing up to 50 grammes will now cost Sh195 up from Sh150 while the rate for those weighing up to 100 grammes has been increased to Sh340 from Sh265.

The move to increase the rates comes amid growing struggles by the State agency whose main service has taken a hit from Internet-based mailing systems and entry of private couriers into the sector.