With the so-called “day zero” scenario looming for the South African Post Office (SAPO), there is a difference of opinion on the efforts to save the ailing entity.
Day zero – identified as 30 October – is understood to be the day when the national postal service is expected to run out of cash reserves required for its operations.
Last week, communications minister Solly Malatsi – whose department oversees 11 state-owned enterprises, including SAPO – tabled his plans to reform the organisation, with the “consideration of privatisation scenarios as a preferential option”.
Malatsi announced in a statement that he has sought National Treasury’s support in forming a task team to pursue private financial and operational partners for the post office.
The Portfolio Committee on Communications and Digital Technologies in Parliament says it strongly believes that strategic and value-creating public-private partnerships are of critical importance to ensure a sustainable post office.
However, it states it’s “extremely concerning” that the minister seems to suggest a foregone conclusion that entering into a public-private partnership must equate to the privatisation of the post office.
Portfolio committee chairperson Khusela Sangoni-Diko says: “SAPO is a strategic state institution with an important mandate to connect people to one another and to the government in a fast-evolving technological age.
“As such, it must remain in the hands of the state, not beholden merely to commercial interests but committed to delivering on its universal services obligations espoused in the Postal Services Act of 1998.
“Further, the position of government cannot and should not shy away from unreservedly supporting the rescue and resuscitation efforts at the post office by, amongst others, preserving, protecting and extending its competitive advantage as provided for in law to reserve its exclusive licence to provide postal services for all parcels weighing under 1kg.
“Such measures and other revenue-generating initiatives, including leveraging its extensive property portfolio, more deliberate action to expand government-to-government procurement spent towards the post office, and enhanced and synergistic public sector partnerships, will go a long way to turning around the post office.”
Once considered a key institution, mismanagement, staff retrenchments and inadequate investment in IT systems have brought the post office to its knees.
The ailing state entity, which has been under business rescue for over a year, is in dire financial straits and its once wide branch network has significantly shrunk over the years.
Despite the post office’s troubles and calls for government to cut its losses and privatise the entity, some within the department have urged fostering partnerships, rather than opting for full privatisation.
In addition, deputy communications minister Mondli Gungubele has touted the postal network’s e-commerce aspirations, noting growing this market as part of the post office’s broader strategy.
The portfolio committee is of the view the business rescue practitioners have failed to deliver on their mandate to rescue, stabilise and ensure the long-term commercial viability of the post office.
As a result, it plans to invite the minister to explain his vision of the organisation and present all different scenarios with evidence and financial implications for each option.
“We support partnerships with the private sector to leverage resources, skills and market access, but that is not privatisation. It is strategic partnerships where risks are shared, not a scenario where the state carries the risks and capital monopolises the upside. That is an old model of public-private partnerships.” it states.
“We want to see clearly thought-out plans that build the capacity of state institutions, while making SAPO commercially viable.”
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