Plunder that brought Postal Corporation to its knees
Seth Onyango @SethManex
At its peak, the Postal Corporation of Kenya was one of the country’s most valuable assets, a commercial behemoth hat had footprints in all corners of the country.
It was also one of the biggest and most sought after employers with an admirable welfare system, including housing.
But years of mismanagement, plunder and the big bang tech disruption have rendered the corporation almost irrelevant as it struggles to keep its lights on and make enough to pay its bills.
Unfortunately, the health of the State corporation seems to have taken a turn for the worse with the very people who are supposed to prescribe its cure signing its death warrant.
Yesterday, ICT Cabinet Secretary Mucheru renewed the contract of Postmaster General Dan Kagwe, the man regarded by many stakeholders as the latest face of mismanagement that has brought the parastatal to its knees.
Kagwe’s new contract, which was sealed in a special Kenya Gazette notice published by Mucheru on Monday night, immediately sparked outrage from staff who have suffered delayed salaries and other hardships under the current leadership.
“Kagwe has mismanaged this corporation... we are, therefore, calling on ICT Cabinet Secretary to revoke his appointment,” Central Organisation of Trade Unions official Ben Okwaro said.
Okwaro was addressing tens of Posta employees who had staged a sit-in at City Square post office, Nairobi, to protest delayed payment of their February salaries.
The employees complained they had been blacklisted by the credit reference bureau for failing to service loans because of irregular payment of salary.
“Our January salaries were delayed and by the time we were paid we had already borrowed left, right and centre. Now we cannot afford to borrow even from M-Shwari,” one of the employees said.
As they listened to their union leader, heaps of parcels and packages to various destinations filled the decks in the holding area at City Square because Posta was yet to pay for freight services, especially for air cargo.
Attempts to get a comment from Kagwe did not succeed yesterday but in past correspondence, the official sought to exonerate himself from problems bedevilling the organisation, saying the alleged corruption and mismanagement happened long before he joined the corporation.
He said contrary to claims that he had brought Posta to its knees, he had actually increased revenue from Sh40 million to more than Sh250 million annually.
“Some of these things which are being said happened when I wasn’t even there... now we are able to pay salaries from leased assets,” he said.
Indeed the issue of leasing the corporation’s assets has been at the heart of accusations of corruption facing Kagwe and his management team.
Succession battle
He clarified that while Posta may lease the property at relatively cheap prices, one cannot blame tenants who spend millions of shillings to put up stalls and other structures to earn a decent profit.
Kagwe said the allegations against him were part of a vicious succession battle at the parastatal.
Yesterday, it emerged that the corporation’s board had declined to renew Kagwe’s tenure and had proposed three names to replace him in acting capacity before the decision was reportedly quashed by the CS at the last minute.
The board met last Tuesday to select the acting PMG and subsequently came up with three nominees, but on Friday tables turned after the decision was overturned, handing Kagwe a lifeline.
Last evening, CS Mucheru defended his decision to renew Kagwe’s contract, saying the board had not been categorical about its position about the Post Master General.
Board chairman Nick Salat was not available for comment.
An internal audit at the corporation revealed that Posta is haemorrhaging millions of shillings through irregular sales and leasing of its facilities to private businesses, often at throw-away prices.
Records show that more than 40 assets spread across the country have been rented to individuals, some for as low as Sh1 per square foot, way below the average market rate of Sh60 to Sh80.
Other assets are said to have been given to friends and relatives who do not pay a dime to Posta.
In a letter to the Ethics and Anti-Corruption Commission in October 2019, stakeholders urged the anti-graft agency to investigate Kagwe over a property leasing scandal involving a prime property opposite Yaya Centre in Nairobi.
Other affected properties are in Nairobi West, Tom Mboya street, Rumuruti, Kisumu, Mombasa, Karatina, Isiolo, Garissa, Eldoret, Garissa, Timau, Naromuru, Naivasha and Maragoli.
At the Tom Mboya Post Office in Nairobi, a tenant pays the corporation Sh150,000 a month while the stalls erected at the facility rake in over Sh1.4 million monthly.
The prime parcel of land opposite Yaya Centre in Nairobi’s Kilimani area has been leased for Sh250,000 to a former Postmaster General way below the market rates.
The 5.03-acre land located on Argwings Kodhek Road in the upmarket suburb was once the cause of a tussle between a car dealership and the corporation.
Posta had initially offered to sell the property to Bharti Airtel International for Sh500 million before car dealer, Wagon Park Ltd, moved to court seeking to block the sale.
The office of the Auditor General has reported several incidents of misappropriation of funds at Posta, including in April 2018 when Sh29 million was stollen by employees.
“Included in the cash and bank balance of Sh323, 974, 413 is an amount of Sh32,404,410 classified as cash-in-transit. A further perusal of the Corporation’s documents revealed that the amount includes Sh29,196,498.57 which was lost in different regions on diverse dates by staff members,” read the report.
The report further highlighted a case in where Sh12,078,150 was lost in the Yaya branch through fictitious pay-in slips.
“This case was investigated and file closed on 6th July 2015 after an insurance settlement of Sh442,813. By 30th June 2017, the total amount of Sh29,196,498.57 was indicated as still outstanding and under investigation, date of recovery unknown.”
Pending bills
The auditor also noted that buildings owned by Posta are not registered with the Lands office, making them vulnerable to grabbing
Also, the management of Posta failed to appoint a leasing committee as stipulated in the Public Procurement and Asset disposal Act, hence there was no basis to lease the properties.
Sources told People Daily that during Kagwe’s tenure, pending bills at Posta had hit Sh3.7 billion up from Sh843 million when took over.
The PMG has also been accused of making unprofessional decisions that have cost the parastatal dearly. A case in point is an attempt to dislodge a lease from a PCK property in Thika which resulted in a court case where Posta was hit with a Sh20 million fine for breach of contract.
He is also alleged to have hired computers and point of sale devices at Sh4 million a month while declining a cheaper offer from Post Bank and Kenya Commercial Bank for the same.
Before the current controversy the Audit General had questions his appointment, asserting it was done irregularly.
“His appointment was not competitive, making it irregular and this is after strategically acting for almost two years and officially took office in March 2017,” reads the audit report, adding that Kagwe was fighting for renewal of his contract which lapsed on Monday.
