Struggling State-owned Postal Corporation of Kenya (PCK) has received a Sh3 billion cash boost from Parliament to aid its turn-around strategy amid pilling financial losses that have affected its operations.
Out of the allocation, Sh1 billion will be used to fund Posta to implement a new corporate structure, while Sh2 billion will be spent to modernise its ICT infrastructure, according to the National Assembly’s Budget and Appropriations Committee (BAC).
“Additional Sh1 billion (recurrent) towards PCK for the implementation of the new corporate structure. Additional Sh2 billion (development) towards PCK for ICT infrastructure modernization,” said the committee in its report for the 2024/25 budget.
Posta is implementing a new organisational structure that is aimed at reducing its wage bill ratio from 82 percent of its revenue to 50 percent by the end of its new Corporate Strategic Plan which runs from 2023 to 2027.
By December last year, the company had 2,360 staff against 1,860 required by the approved structure leading to an excess of 500 staff.
Posta has also been seeking to modernise and optimise its facilities in a rapidly digitising world.
This comes at a time when the company has accumulated losses for years totalling Sh6.28 billion by June 2022, according to its most recent available financial results. The company’s total liabilities have ballooned to Sh8.3 billion against an asset base of just Sh1.6 billion resulting in a negative working capital of Sh6.7 billion.
