The irony about the Post Office strike, former First National Bank CEO Michael Jordaan tweeted this week, is that the longer it drags on, the more its customers will move to electronic alternatives — never to return.
That the Post Office is in crisis is in no doubt. For more than 10 weeks, mail — letters, bills, magazines, assorted parcels — has been piling at its sorting centres.
The only surprise is there hasn’t been a bigger outcry from its customers. That consumers aren’t up in arms must give the institution real reason to be worried: if its clients have become blasé about the strikes, which have crippled the company with alarming regularity in recent years, it must mean they’re finding alternatives. Private courier companies will be smiling.
The question this latest strike raises is what should be done about the Post Office.
The strike comes a year after the UK privatised Royal Mail and floated it on the stock market, not without controversy.
Ultimately, privatisation may be the best outcome for the Post Office, too, although such a move would probably only happen under a post-ANC administration, one that realises that state-owned enterprises tend to be inefficient and act as a drag on the economy and the national fiscus.
A government that stubbornly refuses to sell the loss-making national airline, casting all logic to one side as it taps taxpayers for one massive bailout after another, is unlikely to adopt a different approach when it comes to the postal service.
Anyway, the Post Office is far from ready to be sold. In its current state, investors would give it a wide berth. For now, the state has no choice but to try and fix the mess.
Indeed, it’s the government that may have got the Post Office into its current mess in the first place. The latest strike appears to have started after the company said it could not afford to honour an agreement reached with labour and supplementary contracts that it entered into with workers. In particular, it hasn’t been able to honour commitments to make contract workers permanent.
Unreasonable wage increase demands from the Communication Workers Union haven’t helped.
But opposition political parties have blamed the financial woes facing the Post Office in part on the withdrawal last year of a financial subsidy meant to help it meet its obligation to deliver the mail in rural parts of the country where it’s uneconomical to do so. The Democratic Alliance and Freedom Front Plus believe the subsidy should be reinstated immediately, according to a report in Business Day.
The withdrawal of the subsidy, coupled with mismanagement and corruption, has plunged the Post Office into crisis, the opposition parties say. CEO Chris Hlekane is on special leave and Janras Kotsi, the head of the mail business, has been suspended.
Earlier this year, President Jacob Zuma, at the behest of former communications minister Yunus Carrim, ordered the Special Investigating Unit to probe “allegations of serious maladministration” at the Post Office, including “unlawful appropriation or expenditure of public money” and “improper or unlawful conduct” by its officials. It’s understood that investigation is ongoing.
The problems cast serious doubt on government’s plans to use the Post Office as the vehicle to launch a state-owned bank. In fact, it’s laughable to think an institution that can’t deliver something as basic as the mail could be entrusted with people’s savings.
First, telecommunications and postal services minister Siyabonga Cwele must ensure the institution gets the basics right. Until last week, when he issued a terse statement urging the unions and the Post Office to play nicely together, the minister had been missing in action. Indeed, his approach to the entire sector, not just the Post Office, has appeared cavalier.
Most crucially, Cwele must ensure that the Post Office has the right leadership team in place to begin to address both its short-term problems and the long-term challenges of repositioning the company for the digital era. The Post Office could play a big role in fulfilment for the expected boom in e-commerce in coming years. It’s not going to do that in its current state.
- Duncan McLeod is editor of TechCentral. Find him on Twitter
- This column was first published in the Sunday Times