Despite the South African Post Office (SAPO) receiving immediate relief of R150 million to keep going, Khusela Sangoni-Diko, chairperson of the Parliamentary Portfolio Committee on Communications and Digital Technologies, believes the funds are “too little to make a meaningful impact”.
As a result, Sangoni-Diko has called for seriousness and urgency from government on the SAPO turnaround.
SAPO business rescue practitioners have indicated the ailing entity requires R3.8 billion to fully implement a turnaround strategy, with modernisation and investment in technology at its heart.
The Department of Communications and Digital Technologies (DCDT), which oversees SAPO, yesterday announced that National Treasury has approved a virement of R150 million to assist the entity to address immediate financial pressures.
“This support is crucial in ensuring SAPO meets its obligations to employees and continues delivering essential services to the people of South Africa,” reads the DCDT’s statement.
Parliament's legislative oversight body for the DCDT has taken note of the funding, but has raised concerns, saying: “It only sustains the operations of SAPO for one additional month and does not go far enough to address the challenges facing the post office.”
In addition, Sangoni-Diko took issue with the pronouncement being made on the day of the committee’s SAPO oversight visit. She states that the ministry has developed an “unfortunate” practice whereby it issues “erratic statements designed with the intention to be seen as bold actions which coincide with the committee oversight visits”.
The chairperson reaffirmed the committee’s call for speedy resolution of the challenges at SAPO.
“Today [Tuesday], the committee received a briefing on the long-awaited turnaround strategy after months of advocating for the South African people to be taken into its confidence on a roadmap to return SAPO to solvency, liquidity and be future-proofed.
“While it is a small step forward, the strategy, to a large extent, still relies on the appropriation and disbursement of the R3.8 billion bailout from the national fiscus. This amount is said to be needed to cover the operational shortfall, payments to statutory creditors and infrastructural investment. National Treasury is on record saying it is not the ideal intervention.”
Sangoni-Diko and the committee would prefer interventions undertaken by the DCDT, in line with its recommendations, for government to intervene directly in SAPO by establishing a joint committee on partnerships mandated to proactively consider strategic, value-adding partnerships with the intention to deliver on some of the areas for which the business rescue practitioners claim to require R3.8 billion.
Sangoni-Diko adds the committee will “closely monitor” the process to ensure it delivers on the aspiration of a modern, repurposed post office of the digital age.
“The committee will continue to pursue its interest in a joint meeting with the Standing Committee on Appropriations to engage on the role of National Treasury in the quest to turnaround its portfolio, including SAPO and the SABC, among others,” she notes.
During the SAPO oversight visit, the committee also engaged with organised labour and the representative of non-unionised staff to be appraised on issues affecting the workers due to SAPO’s current situation, which include arbitrary retrenchments and payment of pension funds.
“The committee will then take the matter up with the department for a response and way forward.”
Strong case for privatisation
Ailing state entity SAPO has been under business rescue for nearly two years, with retrenchments, financial pressure and a shrinking branch network during this time.
Despite this, political principals, including the portfolio committee, have asserted that the post office must remain in the hands of the state, which will require further financial assistance from National Treasury.
SAPO received a R2.4 billon funding allocation from National Treasury in 2023.
According to the treasury’s documents, bailouts cost government R520 billion from the 2008/9 financial year, to date. It has maintained that government’s stance is not to provide further bailouts to state-owned entities.
With Solly Malatsi at the helm of the DCDT, the minister last year tabled his plans to reform the organisation, with the “consideration of privatisation scenarios as a preferential option”.
The Democratic Alliance’s Malatsi has long favoured the idea of public-private partnerships for some of the entities within his portfolio, previously telling ITWeb that the South African fiscus faces a lot of pressure, with National Treasury making it clear that its pockets are not that deep.
ITWeb understands that identifying private sector partners is high on the agenda for the post office turnaround.
According to the DCDT statement, beyond the received immediate relief, it is actively pursuing long-term measures to stabilise and sustain SAPO.
“A key part of this effort is the exploration of private sector partnerships, undertaken with the assistance of the Development Bank of Southern Africa through the joint task team with National Treasury to explore further strategic options for SAPO’s future.
“SAPO remains a critical national asset, uniquely positioned to enhance service delivery and provide affordable postal, courier and digital services − particularly to underserved communities − thanks to its extensive national footprint.
“The department is committed to ensuring SAPO’s long-term sustainability and will leave no stone unturned in securing its future. In the immediate term, the department continues to work on finalising the business rescue process to provide clarity and stability for SAPO’s future.”
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