The workers had petitioned Parliament to probe the corporation’s failure to pay salaries.
Posta has not paid its over 2,000 employees since March, saying since the onset of Covid-19, its revenues dwindled to nearly nothing.
The Post Master General Dan Kagwe told MPs that by June the corporation had accumulated losses to the tune of Sh5.9 billion.
The National Treasury has approved Sh810 million to settle salaries for employees of the State-owned Postal Corporation of Kenya (PCK), who have gone for six months without pay.
The workers had petitioned the National Assembly through the departmental committee on Information, Communication, and Technology to probe the corporation’s failure to pay salaries.
The employees had also requested that Parliament recommends that the ICT Cabinet Secretary to initiate the process that could rescue PCK from its current financial crisis.
On Tuesday, Treasury Principal Secretary Esther Koimett told the parliamentary committee on Labour that the ministry had allocated Sh810 million to PCK, after a request from the ICT ministry earlier this month.
“The ministry (ICT) wrote to Treasury seeking the funds as a short-term solution. The Sh810 million will be used to settle salary arrears for the six months,” Ms Koimett said.
Posta has not paid its over 2,000 employees since March, saying since the onset of Covid-19, its revenues dwindled to nearly nothing.
“PCK gets cash from its operations and not from Treasury budgets, the corporation plans its own budget. When Covid-19 came and international flights were halted, its revenues went down to almost zero and so it could not pay workers,” ICT CS Joe Mucheru told the committee.
Dwindling fortunes
The bailout from Treasury comes even as the two ministries insist that the corporation cannot continue to operate as a loss-making venture, signaling its restructuring.
“This issue of PCK appears similar to what used to happen to Mumias Sugar Company. The government would bail it out to pay workers and that kept happening again and again until it died,” said Malava MP Malulu Injendi.
In the last 10 years, Internet service providers and the entry of giant telco Safaricom ticker:SCOM, have drastically cut reliance on Posta for the physical delivery of letters.
The parastatal’s fortunes have dwindled following an uptake of email, calls, SMS, and social media which has resulted in a major decline in mail correspondence, especially among individuals.
The Retirement Benefits Authority (RBA) has also taken over the Posta pension scheme after the State firm failed to remit more than Sh1 billion that had been deducted from staff for the retirement fund.
The Post Master General Dan Kagwe told MPs that by June the corporation had accumulated losses to the tune of Sh5.9 billion.
Mr Mucheru said they are awaiting the Controller of Budget for approval after which the Treasury bailout will be channeled to the corporation.
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