Posta to write off millions owed in box rent arrears

The Postal Corporation of Kenya is set to write off tens of millions of shillings in unpaid fees for letter boxes that have remained in default for lengthy periods.

The Corporation says it is waiving all private box rental arrears up to 2015. Customers will be required to pay up their 2016 dues to benefit from this waiver.

As of October, 50,000 of the corporation’s 450,000 rentable boxes were idle as customers defaulted on their fees.

An estimate by the Business Daily indicates that if all the defaulters are in the individuals category, which attracts charges of Sh2,320 per year for a box, the corporation could forego Sh116 million in revenue for each year of written-off debt.

The amount could, however be more if customers claim waivers for more than one year or if some of the defaulters are corporates that are charged higher annual rental fees than individuals.

Posta argues that the write off will act as an incentive to draw customers back to using its services.

“We want to increase our revenues. There is no point in having idle boxes,” Postal Corporations corporate communications manager Gichuki Njeru told the Business Daily.

Under the campaign, customers who pay two years’ worth of rental fees in advance will get a 10 per cent discount.

The Postal Corporation can legally reposes and resell the boxes of defaulting customers.

READ: Posta woos clients with platform linking address boxes to phone numbers

In rural areas where there is low demand, however, customers who have gone years without paying their fees stand a chance to recover their boxes.

Mr Njeru says most of the defaulting accounts are in rural areas. Previously, the corporation has called on the Communications Authority of Kenya to support the running of non-profitable post offices in remote areas.

Posta has been trying to revive flagging revenues amid tough competition from a robust private courier sector as Kenyans increasingly turn to electronic mail.

Posta has been incorporating technology into its services, linking post office boxes to mobile phone numbers and planning a new mobile money service.

The company has been reaching out to the university-age demographic through its luggage-delivery service Travel Lite.

Statistics from the Communications Authority of Kenya indicate that the number of letters posted in Kenya in the three months to June 2016 rose 29.2 per cent to 16.6 million.

This belies a generally negative trend in the sector that saw revenues from the postal and courier sector drop 43.7 per cent to Sh4.8 billion in the 2015/2016 financial year.