Ministerial Statement essential on SAPO’s trust deficit disaster
A lack of confidence by government, commercial banks, customers, staff and the general public in the SA Post Office (SAPO) spells disaster for the entity unless quick solutions are tabled to deal with its liquidity problems and future sustainability.
As such the DA calls on the Minister of Telecommunications and Postal Services, Siyabonga Cwele, to make a Ministerial statement in terms of Rule 106(1) of the National Assembly (NA) Rules to brief Parliament and the nation on the progress of the Post Office turn-around strategy that appears to be largely unsuccessful.
While SAPO Board Chairperson, Dr Simo Lushaba, appeals for a government bailout, the outstretched begging bowl remains unfilled by cash-strapped Finance Minister Nene’s MTFS refusal to fund inefficient state-owned entities. The SAPO is being left to its own devices.
A meeting with SAPO Board Chairperson and senior management at its Centurion headquarters on Saturday morning revealed a growing financial deficit of costs exceeding falling revenue, cash outflows larger than inflows, and a broken relationship of trust between the organisation and its staff, customers, suppliers, commercial lenders and the government itself.
Notwithstanding its R1.2 billion government guarantee earlier this year, stringent, costly conditions imposed by reluctant commercial lenders means the SAPO is struggling to raise overdraft funding. Current lender ABSA is insisting that an existing overdraft of R250 million be halved by year-end. This places further pressure on SAPO’s negative cash flow, which has led to late salary payments, unpaid creditors, and premises locked by landlords for non-payment. Most recently, the Krugersdorp Mail Centre and Bryanston Post Office have been shut for non-payment, further eroding confidence in the entity.
The SAPO turnaround appears to have failed. Anticipated government revenue has not materialised, while customers and mail revenue lost following last year’s four-month long strike will not return, having found alternatives.
The National Development Plan prioritises Public-Private Partnerships as a means of delivering services. Government must honestly appraise the SAPO’s prospects for future sustainability – it cannot go it alone anymore.
A substantial recapitalisation of the entity can be achieved by sweating its property portfolio, selling non-core assets, and requesting proposals on the sale of the Postbank, currently the only profitable portion of the SAPO, with a subsequent revenue stream created that can support the SAPO’s Universal Service Obligation.
Government should also take immediate steps to end the SAPO’s legislated mail and small parcel monopoly, and through engagement with the private sector, get the mail moving again.
Issued by Cameron Mackenzie, DA Shadow Deputy Minister of Telecommunications and Postal Services, 4 November 2015
