Financially crippled Malawi Posts Corporation (MPC) has pleaded for a bailout from its shareholder, Malawi Government, to revitalise its operations.

MPC board chairperson Noel Mkulichi said in an interview yesterday the parastatal is struggling because postal business, its main source of income, has declined by about 95 percent.

To attain a turnaround strategy, MPC is on record as having said that it needed a commitment of about K41 billion to cover the unserviced statutory obligations and creditors while K30 billion would be used for investments.

Mkulichi said on average, MPC generates about 80 percent of its K200 million monthly wage bill, leaving a 20 percent deficit.

He said: “So, you can see that almost every amount we collect goes towards payment of those wages and we still need to settle utility bills, pay for accessories for the courier, bus and postal services and spare parts.

“There are several strategies we want to put in place, but for those to take place there is need for a bailout. If not the bailout then government needs to give us a go-ahead to borrow [money] either locally or internationally.”

Currently, some of the parastatal’s employees have gone two months without pay.

He said the institution is struggling to pay salaries because employees who were supposed to be laid off are still in the system.

Mkulichi said the MPC board of directors approved, among other strategies, the disposal of its building in Zomba to use part of the proceeds to downsize the number of its employees.

But he said K1.6 billion  from the sale of the building was not used for the intended purpose, a development that has compelled the board to relieve the acting postmaster general Zachaeus Meke of his duties.

Mkulichi, however, could not disclose the exact amount which MPC would have used as terminal benefits from the Zomba building sale.

“If that money was there, we would have at least gotten rid of a few individuals and reduced the wage bill,” he said.

On Meke’s dismissal, Mkulichi said the decision was arrived at following a National Audit Office audit of how K1.6 billion realised from the sale of its building in Zomba was managed.

He said the appointment and disciplinary committee met and felt there was insubordination and recommended his dismissal.

In a separate interview yesterday, Meke confirmed receiving communication on his dismissal.

But he dismissed Mkulichi’s assertions of insubordination, arguing that the board did not give any direction on how the proceeds should be used.

Meke said MPC owed other institutions about K13 billion and that part of the proceeds were channelled to the debt.

He said: “The building was sold at K1.6 billion to Southern Region Water Board, but it [the water board] deducted about K360 million for utility bill arrears and K100 million for Malawi Revenue Authority.

“Still the hole is too big to be filled by that sum. For example about K338 million was used to pay staff salary arrears, FDH Bank deducted a bank loan of about K300 million, K100 million for bus insurance and the remaining was used to pay salaries.”

In 2021, Vice-President Saulos Chilima said government would not bail out MPC and other struggling parastatals. During an assessment of public sector reforms, MPC had sought a bailout, but Chilima challenged the corporation to devise a turnaround strategy.

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