Union asks State to bail out ‘broke’ corporation
CASHFLOW: Postal Corporation of Kenya (PCK) employees have requested the State to bail out the country’s oldest parastatal, saying it has serious cash flow challenges and cannot meet its financial obligations.
Speaking on behalf of the employees, Communication Workers Union of Kenya Secretary General, Benson Okwaro said the State corporation owes its workers Sh282 million in salary arrears. He said the workers have gone without pay between April and June.
Additionally, it owes Sh1.3 billion to various institutions in outstanding staff deductions.
“As we speak currently the PCK has serious cash flow problems to the extent that they cannot meet their financial obligations including payment of employee salaries which has remained outstanding since April,” said Okwaro.
“I therefore take this opportunity to appeal to the government, and particularly the Head of State to come to the assistance of PCK and authorise a cash bailout for the corporation to enable it meet its financial obligations and to return profit making,” he added.
The salary arrears include Sh14.9 million accrued in March, Sh89.9 million in April, Sh88.3 million in May and Sh89.1 million in June.
As of June 30, the corporation had outstanding staff deductions owed to banks, Saccos, insurance, pension funds, and statutory deductions amounting to Sh1.3 billion, according to Cowu.
PCK owes insurance companies Sh1.5 billion, PCK pension fund Sh932.5 million, Banks Sh281.7 million, Saccos Sh67.9 million, NHIF Sh3 million and NSSF Sh1.2 million.
Documents availed by the union show that in the just-ended financial year 2019/20, PCK expenditure stood at Sh3 billion against Sh2.3revenue, a Sh705.8 million net loss.
Financial difficulty
Postmaster General, Dan Kagwe, acknowledged that the corporation was facing financial difficulty and supported calls to have a State bailout, saying there was nothing wrong with the state supporting a corporation it owns.
“What they are saying is true. And the Corporation is owned by the government. I don’t see why not,” he said referring to the proposed bail out.
Kagwe, however, blamed the current financial challenges on Covid-19 pandemic, saying it had severely affected PCK’s international mail section among other sources of revenue.
