The National Treasury has approved Sh810 million for payment of the six-month salary arrears of employees of the Postal Corporation of Kenya (PCK).
The decision came after the workers petitioned Parliament following the state corporation’s failure to pay them since March, when the Covid-19 pandemic was reported in the country.
Treasury Principal Secretary Esther Koimett on Tuesday told Parliament’s Labour committee that the ministry had allocated the amount to the corporation.
Ms Koimett said the Treasury did so after the ICT ministry wrote to it early in September, asking it to inject funds for payment of salaries.
"The ministry (ICT) wrote to the Treasury seeking the funds as a short term solution. The Sh810 million will be used to settle salary arrears for the last six months," she said.
No revenues
The corporation has not paid its over 2,000 employees since March and says it made almost nothing in revenue due to the pandemic.
"PCK gets cash from its operations, not from Treasury budgets. The corporation plans its own budget," ICT CS Joe Mucheru told the committee.
"When Covid-19 came and international flights were halted, its revenues went down to almost zero, so it could not pay workers."
The bailout from the Treasury comes as the two ministries insist the corporation cannot continue to operate as a loss-making venture and that it must be restructured.
Procedures The money will not hit the workers’ pockets immediately since the ministries said all legal processes must be followed.Ms Koimett and Mr Mucheru said the Treasury submitted the budget to the Controller of Budget for approval and that the money will be channeled to PCK once this step is completed.The state corporation has been performing poorly for years now and MPs were worried that it was unable to pay salaries even with the bailout,"This PCK issue appears similar to what used to happen to Mumias Sugar Company. The government bailed it out again and again so it could pay workers until it died," said Malava MP Malulu Injendi.The corporation is being choked by multiple challenges including a redundant and ageing workforce, lack of innovation in its services and huge pending bills.Postmaster-General Dan Kagwe told MPs that by June, the corporation had accumulated losses to the tune of Sh5.9 billion.