Posta Kenya: ‘We don’t want hand-outs’

The management of the Postal Corporation of Kenya (PCK)- Posta Kenya says the agency will not join the queue of State parastatals depended on Treasury bail outs to stay afloat.

While the Corporation had stated it required Ksh.1 billion annually to keep its operations going, Post Master General Dan Kagwe insists the parastatal can still foot its own bills.

This is as he terms last year’s Ksh.810 million bail out by the exchequer as a one off occasioned by disruptions by the COVID-19 pandemic.

“We don’t want hand-outs. I’ve always said that we have not been funded by the National Treasury for over 100 years, nothing has changed. We are not in a situation where we need day to day assistance from the government. If this has not happened in 100 years, I don’t think we will die tomorrow,” Kagwe told Citizen Digital in an interview on Thursday.

The sentiments by the Post Master General are on the back of a fall out between Parliament and the Communication Authority of Kenya (CA), over the funding of Posta through the Universal Service Fund (USF).

According to Kagwe, the funding of Posta via the USF is unnecessary and would moreover require prior law changes by the National Assembly.

The CA has deemed the proposal to fund the PCK to the tune of Ksh.1 billion as untenable as a long-term intervention to prop up the operations of the parastatal.

On its part, Posta believe the government focus should be on growing the parasatatal’s revenue by choosing it the corporation as its clearing and forwarding agent of choice.

“What the government needs to do is utilize the capacity of the post-office to do its business. We’ve already seen the impact this can have. Our best years have been during elections where the government has handled and distributed election material through the post office,” added Kagwe.

Kagwe sees the future of Posta Kenya intricately tied down to logistics with modern means of communication having trimmed part of its business.

“The future of this Corporation as far as I’m concerned is logistics. Something somewhere must be delivered in one way or another. Even if we have emails and the internet, 99 per cent of other things must be delivered and most of them physically,” he said.

“In terms of brick and mortar, Posta Kenya has the greatest network in this country. What we are asking is for people to make use of the system.”

Posta says it is currently through two months of its rapid response initiative which is targeted at improving the turnaround time (ToT) and optimizing its routes and other resources.

The State Corporation is nevertheless still reliant on mail business for three quarters of its business meaning it must quickly change is channel contribution to revenues to keep floating.

Only about 24 per cent of PCK’s revenues are derived from courier services with the balance coming from rentals and finance agency services.

The National Assembly Labor and Social Welfare Committee has recommended the PCK be integrated to the newly formed Kenya Transport and Logistics Network (KTLN) to meet the last mile delivery role.