Posta assets seized over debts
Jul 24, 2008
THE Managing Director of Posta Uganda, James Arinaitwe, has told MPs that the company has a debt of sh11.8 b, which it can never meet.
By Cyprian Musoke
THE Managing Director of Posta Uganda, James Arinaitwe, has told MPs that the company has a debt of sh11.8 b, which it can never meet.
Appearing before the information and communication technology committee chaired by Edward Kafuufu yesterday, Arinaitwe said Uganda Revenue Authority, which is demanding sh3.4b in tax arrears, had put a caveat on the general post office building to stop business until the company pays up.
Stanbic Bank, he added, had ceased their plot near Queen’s Way Clock Tower for failure to pay debts.
In addition, the company owes NSSF sh1.8b in un-remitted workers’ contributions, sh1.1b to uganda telecom, totalling sh11.8b.
“This is a huge debt far higher than our total annual budget,†Arinaitwe said.
Arinaitwe added that the board of directors had earlier resolved to write off sh2.2b because it was found irrecoverable.
“As we stand now, Posta Uganda is insolvent,†Arinaitwe said, adding that the company had not been able to position itself in today’s competitive market.
Arinaitwe said because of universal service obligations, the company was forced to retain remote post offices that are not economically viable.
“We are mandated to run a post office in remote areas, rent a building and pay staff who make sales of only four stamps worth sh1,000. This washes away even the little profit we make from the big centres like Kampala,†he said.
He pleaded with the Government to fund the maintenance of the remote offices. Among other causes of their woes, Arinaitwe cited constant change of managers for the company, a total of five in only two years.
“The emergence of ICT has drastically reduced the letters we are handling. We are trying to adjust with difficulty,†he added.
The company made a loss of sh4b in 2003, sh2b in 2004, sh400m in 2005 and sh1b in 2006.
The company workers’ union had sued the company in the commercial court for non-payment of their dues. The company has also spent a lot of money negotiating with URA lawyers and paying legal fees.
“We are likely to close very soon because I can see URA coming in anytime and closing the post office building itself,†he said.
Bank of Uganda officials said if Posta continued making losses, it would not have another option but to close.
THE Managing Director of Posta Uganda, James Arinaitwe, has told MPs that the company has a debt of sh11.8 b, which it can never meet.
Appearing before the information and communication technology committee chaired by Edward Kafuufu yesterday, Arinaitwe said Uganda Revenue Authority, which is demanding sh3.4b in tax arrears, had put a caveat on the general post office building to stop business until the company pays up.
Stanbic Bank, he added, had ceased their plot near Queen’s Way Clock Tower for failure to pay debts.
In addition, the company owes NSSF sh1.8b in un-remitted workers’ contributions, sh1.1b to uganda telecom, totalling sh11.8b.
“This is a huge debt far higher than our total annual budget,†Arinaitwe said.
Arinaitwe added that the board of directors had earlier resolved to write off sh2.2b because it was found irrecoverable.
“As we stand now, Posta Uganda is insolvent,†Arinaitwe said, adding that the company had not been able to position itself in today’s competitive market.
Arinaitwe said because of universal service obligations, the company was forced to retain remote post offices that are not economically viable.
“We are mandated to run a post office in remote areas, rent a building and pay staff who make sales of only four stamps worth sh1,000. This washes away even the little profit we make from the big centres like Kampala,†he said.
He pleaded with the Government to fund the maintenance of the remote offices. Among other causes of their woes, Arinaitwe cited constant change of managers for the company, a total of five in only two years.
“The emergence of ICT has drastically reduced the letters we are handling. We are trying to adjust with difficulty,†he added.
The company made a loss of sh4b in 2003, sh2b in 2004, sh400m in 2005 and sh1b in 2006.
The company workers’ union had sued the company in the commercial court for non-payment of their dues. The company has also spent a lot of money negotiating with URA lawyers and paying legal fees.
“We are likely to close very soon because I can see URA coming in anytime and closing the post office building itself,†he said.
Bank of Uganda officials said if Posta continued making losses, it would not have another option but to close.