State neglect behind PCK’s collapse

Even before the advent of the coronavirus pandemic, it was clear to everybody that the State-owned Postal Corporation of Kenya (PCK) was in dire financial straits.

As one of the oldest State corporations, it has not been able to pay salaries to workers for the last four months. If you ask why the financial fortunes of this corporation have deteriorated to these levels, you will be told that it has suffered from technological disruption.

The advent of the internet is undoubtedly one of the factors. But I hold the view that government neglect is the most important factor.

Following the break-up of the defunct Kenya Posts and Telecommunications Corporation (KPTC) in 1999, political elites within successive administrations just found it politically expedient to ignore and forget about PCK and to concentrate on the telecommunications side.

Faced with technological disruption, PCK needed to restructure to become more efficient and be able to compete with nimbler competitors.

To make it worse, it was forced to carry the responsibility of providing universal services without being compensated by way of subsidies.

Indeed, PCK must provide maximum services regardless of cost – and is obligated to provide universal services under United Nations protocols that designate postal services as a human right that should be available to everyone.

It has been unable to shut unprofitable post offices across the country.

A study by the management found that the corporation needed to be funded to the tune of Sh650 million every year by a universal obligations fund that is managed by the Communications Authority of Kenya to cover the cost of running unprofitable post offices. This did not happen.

At times, I get the impression that the political elite in successive administrations deliberately killed the corporation so they could grab its land.

With a national network as expansive as the provincial administration, the corporation used to be one of the biggest property owners in Kenya, owning land and buildings literally in every urban area of Kenya.

During the break up of KPTC ,the government published a notice entitled ‘‘transfer and vesting of assets and liabilities to the Postal Corporation of Kenya’’.

Successive reports of the Auditor-General have documented a scramble for its properties all over the country by corrupt elites.

If you want to appreciate the extent of land belonging to the corporation that has been grabbed, the place to start are audited accounts of the corporation’s books.

For many years, successive post-master generals have been writing to both the Ethics and Anti-Corruption Commission and the Ministry of Land seeking assistance to recover PCK land that was grabbed by influential individuals

Benign neglect and the exploits of corrupt elites – not technological disruption is the biggest factor in the collapse of this strategic parastatal.

Clearly, lack of strategic thinking by the shareholder-namely, the government is also a big factor.

At the time when we were unbundling the defunct Kenya Post and Telecommunications- by creating Telkom Kenya, PCL and the Communications Authority, we did not apply strategic thinking about the future of the company.

Admittedly, PCK is still able to make regular deliveries to remote and secluded areas of this country that would not be worth the trouble for a private business.

Even though the internet is become increasingly ubiquitous and with mail delivery service facing a crisis of obsolescence, it seems to me that we are still going to need a way for delivering hard copy – matters such as court summonses and registered mail to every home and business in the country – a feat none of the corporation’s competitors can match.

As a matter of fact, its competitors still rely on it to deliver for them millions of their letters every year. It provides last mile services.

It’s sister company, Kenya Posts and Savings Bank (KPOSB) has also been neglected by the shareholder.

Established way back in 1910, it is Kenya’s oldest micro savings bank. Yet due to neglect by the government it remains insolvent and badly needs to be either recapitalised, or merged with another bank.