Posta sinks into debt as billions go missing

Kampala

Posta Uganda is struggling to stay in business amid fears of growing debt worsened by a recent cash scandal involving the alleged misuse of $1.2 million (about Shs2.3b), it emerged yesterday.

The parliamentary Committee on Commissions, Statutory Authorities and State Enterprises heard that Postal Corporation of Kenya paid Shs2.3 billion to Posta Uganda in respect to money transfer services and the money has since vanished through unclear circumstances.

“Posta Uganda is ‘rotten’ and collapsing,” the committee chairman Reagan Okumu said, adding: “These people are sinking in debts worth about Shs12 billion, yet they continue to misuse public funds. They don’t even have working capital yet over Shs2 billion is missing.”
The committee was yesterday meeting the management of Posta Uganda on audit queries.

The committee heard that the company’s debt has accumulated over the years as a result of underfunding from government. There is fear among legislators on the committee that if government does not bail out Posta, it could collapse, and any closure of postal services would affect the country’s communication system, which is crucial to national development.
The company’s Managing Director, Mr James Arinaitwe, told the committee that news about money owed to Kenya is a surprise to them. “We are fairly a new team.All the heads of departments are new. This Kenyan debt also shocked us,” he said.
The committee yesterday asked the Criminal Investigations Department to probe the alleged Shs12 billion, including the $1.2 million owed to Kenya. Mr Arinaitwe said debts have affected operations of the company. “It’s no longer business as usual, these debt have affected us and we are spending a lot of money and time paying them. People are always on our doors asking for their money which we don’t have,” Mr Arinaitwe said. The committee asked Posta Uganda officials to submit records on the level of indebtedness, monthly income, list of workers, their property and value.

Mr Arinaitwe also told the committee that for the last six months, the office of the Prime Minister, which occupies four floors on Postal Building, has not paid rent amounting to Shs480 million.

Numerous debts
The committee heard that Posta Uganda also owes NSSF Shs1.5 billion and Uganda Revenue Authority Shs1.3 billion. The committee summoned the Board of Directors of Posta to appear on February 8 and answer questions on alleged mismanagement of the company.
Posta Uganda is a government parastatal and offers mail delivery services to over 70,000 post boxes in the country.