Government working to save SA Post Office – Gungubele

Communications and Digital Technologies Minister Mondli Gungubele has assured parliament that government is working tirelessly to save the South African Post Office (Sapo), which was placed under provisional liquidation this year.

“We want to assure you that we have been working tirelessly with the entity to explore various options to find an optimal approach within the legal prescripts and confines of the provisional liquidation to save the entity and ensure business continuity,” Gungubele said this week.

Provision of essential services

Addressing MPs in Cape Town, he said the post office is working with the provisional liquidator to ensure the provision of essential services is not affected.

“We will, in the next coming week, table an approach to Cabinet for approval to ensure business continuity. We want to reiterate that government’s main objective is to ensure that this entity is repositioned, modernised, and continues to serve the millions of South Africans it has been serving over the past 200 years,” Gungubele said.

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Over the years, the post office has faced myriad challenges, which have threatened the sustainability of the entity.

The evolving market factors and technological advancements have displaced the need for physical letters. As a result, letter volumes are declining and in tandem, revenue reduced from R3.4 billion in 2015 to R2.6 billion in 2022.

“Additionally, the growth of electronic financial platforms has posed a further threat to the SA Post Office financial services segment, as transaction volumes and revenue have also declined.

“In the 2014-2015 financial year, the entity experienced a prolonged and crippling strike, which lasted about five months, from which it has never fully recovered,” said Gungubele.

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Between 2012 and 2019, a total of 10 384 part-time employees, who were previously only engaged by mail centres during peak periods, were absorbed on a full-time basis.

Post office turnaround strategy

Furthermore, monies intended for a turnaround strategy were used for consumption instead of investment in infrastructure and modernisation.

“Therefore, these incidents adversely affected the cost structure of the company. The advent of Covid exacerbated the financial challenges facing the entity, further affecting its ability to pay its creditors. Sapo has seen slow recovery over the past few years, despite interventions from government,” Gungubele said.

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The services of a senior legal counsel and external lawyers have been sourced to provide advice and guidance on the optimal option in dealing with these matters.

“Our plan is to get the matters resolved before the 1 June final court date so that the entity can continue to operate,” he said.

– SAnews.gov.za