MPC seeks K42 billion bailout

Financially struggling Malawi Posts Corporation (MPC) says it needs about K42 billion to settle debts and invest in viable business that will help it turn into a profit-making entity.

MPC acting postmaster general Zacheaus Meke yesterday told the Parliamentary Committee on Media, Information and Communications that the corporation is choked with a K10 billion debt at the time it also needs to address staff welfare.

He was presenting to the committee the status of the company after the MPC Workers Union had asked the committee to intervene on various challenges workers were facing.

Meke stressed that MPC cannot generate enough money; hence, the need for K42 billion to settle debts and invest for it to start performing.

This is the second time the corporation has asked for a bailout after the government rejected its initial K18 billion bailout request.

Meke said in addition to the K10 billion debt, the corporation is also K6.5 billion in tax arrears.

He said: “Apart from staff demanding their dues, sheriffs have also been coming to MPC to impound property, including buses.”

Meke said MPC has been making losses since 2000 and is operating over 120 post offices that do not make economic sense.

He further told the committee that MPC is over-staffed as it has 804 employees when in reality in needs 310 workers.

Meke said the parastatal spends K220 million monthly on staff costs against K160 million revenue per month.

He said the best option MPC has is to lay off staff as some employees cannot be transferred to other institutions due to lack of requisite qualifications. He said 75 percent of the employees at the corporation do not have a Malawi School Certificate of Education.

Meke added that MPC is working on a strategy where communities will run some post offices.

He also bemoaned a lack of policy framework to protect MPC as it is left to compete with the private sector.

In his presentation, MPC board chair Noel Nkulichi recommended that employees that do not fit into the new MPC should be laid off, saying the corporation would be saving about K1 billion.

MPC Workers Union chairperson William Chipoka said the union engaged the committee after management failed to look into their concerns and obtained an injunction to stop them from holding a strike.

The employees have been complaining of salary delays and since November 2020, the employees have not been getting salaries on time. The salaries sometimes delayed by over two months.

The workers also said management has also not been remitting pension contributions and not paid life assurance for at least three years, accumulating to K726 million and K220 million, respectively, despite pledges made on June 22 2021 to remit K300 million to Old Mutual.

Parliamentary Committee on Media, Information and Communications chairperson McNice Aboo Naliwa said the committee will present to Parliament the appeal to recapitalise MPC.

He said: “Our duty is to take the matter to the whole House. We will have to address it and ask the House that the government should do something sooner or later.”

Naliwa also called on MPC to follow the law when handling  employees’ grievances.

 The committee also asked MPC to submit its turnaround strategy  and directed it to craft a post office service policy and start implementing it before the end of the year.

The committee also asked MPC to come up with a business plan for a period of 15 months starting from October 6 2021 to ensure some challenges are ironed out.

In 2020, MPC asked the government for an K18 billion bailout, but Vice-President Saulos Chilima, in his capacity as Minister responsible for Public Sector Reforms, said government would not go into the habit of bailing out companies.