Communications minister Solly Malatsi has approached national treasury for assistance in involving the private sector in saving the Post Office.
The minister said in a statement on Wednesday that he has asked for treasury’s support in forming a task team to “pursue private financial and operational partners” for the beleaguered state-owned company, which is in business rescue and facing potential liquidation without government support.
Malatsi, who is a Democratic Alliance politician serving in the government of national unity, said his plan must seriously consider “privatisation scenarios” as a preferred option to further state funding of the Post Office. He didn’t say whether he’s keen to privatise the entire enterprise, or to sell off some of its assets.
“It’s clear that any allocation of previously committed funds to the Post Office will be based on a revised business plan by the business rescue practitioners that meets treasury’s expectations,” he said in the statement.
“In addition, we will work to ensure that there is accountability for the failure to meet previous conditions that were imposed for the financial support the Post Office received from the fiscus.”
Malatsi said he will seek an end of the Post Office’s monopoly over postal services – including the delivery of small parcels and letters. He said postal services around the world are “transitioning away from monopolies” and the “preferred outcome for the Post Office to get back on its feet by regaining the public’s trust, including public entities, not through compulsory use of its services”.
Aggressive downsizing
“Furthermore, retrenchments or the withholding of salaries should be avoided as the Post Office is already facing difficulties in attracting talent and maintaining employee morale,” the minister said. “There has already been necessary but aggressive downsizing. Now a motivated and stable workforce is essential to the success of any recovery plan.”
He said he is “committed” to exhausting “all reasonable avenues to make the Post Office financially sustainable”.
Read: State extends Post Office monopoly that’s already widely ignored
“It is uniquely placed to leverage integration with other state entities for enhanced services to the public, as well as providing affordable postal, courier and digital services to otherwise excluded or underserved communities.”
Malatsi’s move to seek an end to the Post Office’s monopoly comes just months after his predecessor in the role, the ANC’s Mondli Gungubele, extended the Post Office’s monopoly over the delivery of sub-1kg parcels until 1 April 2025.
According to a notice published in the Government Gazette at the time, these “reserved postal services” include the “delivery of all letters, postcards, printed matter, small parcels and other postal articles subject to the mass size limitations”. These limitations are:
- Length: 456mm
- Width: 324mm
- Thickness: 100mm
- Cylinders having a maximum length of 458mm and 100mm thickness and a mass of up to 1kg are regarded as “letters”.
The monopoly is designed to fend off competition from privately owned courier companies. The enforceability of Gungubele’s directive is, however, already questionable as courier companies deliver sub-1kg parcels regardless of the rules.
The Post Office was placed into business rescue last July. According to the business rescue plan, it has debts of R4.5-billion, with R3.9-billion owed to Postbank and about R400-million owed in rental arrears. — © 2024 NewsCentral Media