In recent years, Sapo has received more than R10bn in government bailouts. Picture: Supplied
President Ramaphosa has given the nod to a new bill that the government hopes will reboot the ailing SA Post Office. Last year, it was placed in business rescue, owing creditors R8.7 billion.
Government hopes the South African Post Office Amendment Bill will breathe new life into one of SA’s oldest surviving institutions, founded in 1792.
The bill expands the South African Post Office’s (Sapo) mandate and repurposes its infrastructure to provide a broader range of services.
Solly Malatsi, Minister of Communications and Digital Technologies, said last month that the government wanted value for the nearly R176 million spent on the business rescue process so far — a cost that has been roundly criticised by trade unions.
The intention is to pursue public-private partnerships to help wean the post office off National Treasury funding and return it to financial respectability.
The new mandate allows the post office to expand its services beyond essential postal services into other value-added services.
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Like postal services worldwide, Sapo faces competition from private mail operators and courier services, and there is a steady migration to digital communications.
The revised vision for the post office aims to transform it into a hub for government and other agency services, emphasising the provision of digital services to businesses and communities.
“The post office will also be able to serve as a logistics partner to other e-commerce providers – including small enterprises and informal traders – and any future business that the state-owned company may develop to serve users and consumers,” according to a statement from the president’s office.
The new-look post office will also be able to serve as a logistics partner to other e-commerce providers – including small enterprises and informal traders – and any future business that the state-owned company may develop to serve users and consumers.
In recent years, Sapo has received more than R10 billion in government bailouts for a meagre return, though its debt has been whittled down from R8.7 billion to R440 million as of June 2024.
This required the closure of hundreds of branches and the laying off of one-third of its staff.
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Finance minister Enoch Godongwana did not blink when the Sapo said it faced closure by the end of October 2024 unless it received R3.8 billion in funding. This was in addition to the R2.4 billion received in 2023. The latest funding request was sprung on government just a month before the threatened closure. Godongwana did not budge, and the post office did not close its doors.
The new bill empowers the post office to adapt its business model to technological changes and other industry developments.
The bill retains the post office’s universal service obligations, such as providing basic postal services at an affordable price. One concession granted the Sapo the exclusive right to courier all parcels under 1 kilogram. These services will be enhanced through the rollout of service points and the ability to use third-party infrastructure.
The law aims to encourage government and public sector institutions to use Sapo infrastructure to deliver their services and to reserve certain services for provision by the post office.
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“This aims to eliminate the company’s over-reliance on government funding and ensure efficient utilisation of post offices,” says the presidency’s office.
The new law also addresses governance matters, such as the size of Sapo’s board and its functions.
This article was republished from Moneyweb. Read the original here.
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