The South African Post Office will review its business operating models, according to the 2015/2016 budget documents tabled in parliament on Wednesday.
Its focus over the medium term was on stabilising business operations and aligning business models with the challenges it faced, the Estimates of National Expenditure stated.
“In this transition period, while delivering on government’s social mandate, the Post Office will adapt to its rapidly changing environment by reviewing postal policy, increasing productivity, improving business operations, and improving financial performance.”
It aimed to achieve these goals by improving cash flow management, reducing costs around infrastructure and procurement, and improving service delivery.
Additional funding of R64,9m was approved for 2015/2016 to implement a new delivery model.
“The new model involves a combination of mobile units and retail postal agencies as opposed to brick-and-mortar structures, and is expected to lower the cost of postal services delivery in underserviced areas.”
The Post Office was paralysed by a strike last year.
Its books reflected a deficit of R682m in the new financial year, based on revenue of R6,9bn and expenses of R7,6bn.
It was estimated that the deficit would be reduced to R350m in 2016/2017.
Revenue was generated from providing postal and courier services as well as from interest income and financial transaction fees.
Non-tax revenue was expected to grow at 4,3% over the medium term due to difficult trading conditions, declining mail volumes and increased competition.
Expenditure on salaries and wages was expected to grow at 1,3% and decrease as a proportion of total expenditure.
To this effect, staff posts would be reduced from 23 775 in 2015/2016 to 22 831 in 2017/2018 “due to the expected rationalisation of staff in line with the turnaround plan”.
The organisation was in negotiations with communications regulator Icasa to temporarily suspend or reduce its universal service obligations over the medium term due to difficult trading conditions. — Sapa