The move to modernise the South African Post Office (SAPO) has been put on hold, pending additional funding of nearly R4 billion.
This was revealed during a briefing by the business rescue practitioners to Parliament’s Portfolio Committee on Communications and Digital Technologies yesterday.
Joined by deputy communications minister, Mondli Gungubele, the practitioners provided an update on SAPO’s “day zero” and mitigating plans.
A “day zero” scenario is where SAPO is expected to exhaust all its cash reserves by October.
Once considered a key institution within South African history, mismanagement, staff retrenchments and inadequate investment in IT systems have brought the post office to its knees.
The state-owned entity has been under dire financial straits and its once wide branch network has significantly shrunk over the years.
The ailing state entity, which has been under business rescue for over a year, seeks another bailout to the tune of R3.8 billion from National Treasury, to improve its fortunes.
At the heart of the national postal network’s turnaround and future is modernisation and investment in technology, the business rescue practitioners previously touted.
However, in a presentation to the portfolio committee yesterday, it was revealed the modernisation and upgrading of the SA Post Office hardware infrastructure and business software applications has been put on hold, pending funding.
The business rescue practitioners provided an update that the development of a Trust Centre to provide e-Registered mail and secure electronic signature services to the public was also on hold, pending funding.
Despite receiving the full R2.4 billon funding allocation from National Treasury in 2023, it was previously revealed that SAPO requires a further R3.8 billion, in order to fully implement the approved business rescue plan.
As a result, a formal application for this funding allocation has been submitted, according to a statement from the business rescue practitioners.
Outlining the actions undertaken over the last few months that include rescaling the business, the practitioners have said 4 875 people out of a total staff complement of 11 083 were retrenched through a Section 189 process, in consultation with the CCMA.
In yesterday’s presentation, it was noted that the rationalisation of the branch network to about 600 branches has been completed. Some 366 post office branches have permanently closed.
The once expansive branch network has now been reduced to 657 branches across SA, inclusive of universal service obligation branches. Of these, 232 sites offer motor vehicle licence renewals through the Department of Transport.
On the looming “day zero”, Gungubele reportedly said it is still a reality for the ailing entity, unless SAPO receives the additional funding.
“Last time, they said it’s the end of October. I don’t see anything changing, it seems to be staying that way,” Gungubele reportedly said
Eyewitness News reported that the deputy minister said the “R3.8 billion would not come arbitrarily and they were still engaging National Treasury”.
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