Frw400m to revamp Post Office diverted

Private Sector Federation (PSF), through its department of advocacy and institutions relations blew the whistle in to parliamentarians that the post office is highly indebted. The government corporation had failed to pay firms that supplied computers and their accessories last year. This was contained in a 21-page position paper, on the 2008 Budget. The paper focused on three major areas; taxes, financial sector, public expenditure and regional integration. Under public expenditure, Emmanuel Hategeka, Secretary General PSF said holding up the business community’s money in debts is hurting businesses and slowing the development of the private sector. He requested government to take appropriate measures to address this issue, including the consideration to provide budget support or liquidate the non-performing government parastatals. National Post Corporation was cited as one of the parastatals that have spent more than nine months without paying its suppliers. Computer Point supplied the Post Office with network cables worth Frw41 million for connection of their local area network (LAN) in the 12 branches. Another firm, MFI Office Solutions supplied messaging and collaboration servers, website servers and computer hardware and software worth Frw102m. It’s from this background therefore that suppliers are complaining that the delay in payment is affecting the performance of their businesses. They say the money they used to purchase these goods was borrowed from commercial banks. They complain that the more they delay to service the loans, the more it accumulates interest. Post Office speaks out Management of Post Corporation admits they have failed to clear the debt however, they complain that they are not given any budget support like other government sectors. Since the corporation falls under the Infrastructure ministry, it was the ministry to effect the payment. A source in the post office requesting anonymity says that the ministry had allocated Frw400m but later the money was re-allocated to fund other activities. “This money was meant for modernisation of the post office,” said the source. Post Office also blames the suppliers for not pressuring the ministry. “Another big issue here is that the suppliers picked on the weaker point (post office) and they ignored where the money was supposed to come from,” he added. The post office again says that the suppliers delayed to supply the goods as was agreed upon meaning that this also affected the payment schedule. But suppliers say that it does not amount to delay in payment of over nine months period but rather one can rescind the contract or give a penalty of the same months of delay. The supplies were supposed to be made in November, 2006 and payment would be effected immediately before the closure of the budget. Contrary to the contract agreements, the firms supplied the goods in March 2007. After recognising that supplies would delay, Post Office advised the suppliers to ask for advance payment because it would be difficult to get the money after the financial year had closed. The source said that they were even willing to assist the suppliers in persuading the ministry of infrastructure to make an advance payment had they (suppliers) offered a bank guarantee of the same amount. Position of Infrastructure ministry According to Vincent Gatwabuyenge, secretary general, ministry of infrastructure, his ministry cannot be blamed. He admitted that the ministry had relocated Frw400m to the post office for the restructuring process. However, he said that the problem was in procurement process. Gatwabuyenge said that they provided the money in the 2006 Budget and that this would be effective between January and September 2006. “So Post Office would have started its procurement process from September 2005 to March 2006, the remaining three months or more would be given for suppliers to do their work. I am sure if they had finished every thing by October 2007, the ministry would have cleared the suppliers,” he said. He said they relocated this money to fund the construction of Gikondo power station which was worth Frw1 billion. He added that they used this money because it seemed that Post Office had no use of it and that the 2006 Budget effectiveness was elapsing. “You see if the budget period elapses you have to make accountability of how you spent and why the balance was not spent. So we used this money because Gikondo power station was argent but we wanted to be in position of accounting for this money,” he explained. He adds that they thought that they would fix the debt in budget revision but unfortunately the budget was tight they could not get the surplus to pay over Frw140m owed to these two companies. The secretary general said that the debt was also not considered even in the 2007 and 2008 Budgets because the government had other priorities like energy, transport, education and many other programmes that are inline with Vision 2020. However, he said that the ministry has asked Post Office to work hand-in-hand with the ministry to raise the money for their suppliers. “I have written to the director general of the post office to discuss with suppliers and see how we can pay them in installments,” he explained. The ministry is planning to limit on its procurement expenditure in order to get some balance which will keep supplementing to Post Office contribution so as to pay the suppliers. “We are eager to pay these guys because they are our suppliers and I think they understand it because we work with them in different projects. We have now got about Frw41m and we are waiting for the Post Office’s response on the issue of paying in installments,” he explained. Ends