Post Office on the brink of collapse... again

15 January 2021

Despite R8 billion in bailouts since 2014, the South African Post Office (SAPO) is once again staring bankruptcy in the face, with reports emerging of unpaid rentals and desperate suppliers, postal backlogs and broken ICT systems.

It comes as no surprise therefore to learn of the resignation of the recently appointed CFO, Ms Khathutshelo Ramukumba, after barely two months on the job, in which time the discovery of the shocking state of financial affairs at the SAPO would make any professional think twice.

It was revealed in a court judgement last year that that the SAPO had lost R1,066 billion as at 31 July 2020, putting it well on track to post double that sum. In the absence of any further funding and expenses far exceeding revenue, the SAPO is resorting to the only means to stay afloat – stop paying creditors.

Suppliers are once again being ‘parked’ in a queue for payment, despite all processes required to effect payment followed, including quotation, purchase order, service delivered and invoice presented. All that’s missing is the money to pay them.

Owners of post office buildings leased by the SAPO are once again not being paid, with reports of rentals outstanding for more than 120 days, even as the SAPO starts selling land and properties – its family silver.

IT systems, including the essential on-line ‘track-and-trace’ service, remain non-functional, so customers have no idea of the status of their parcels or mail – registered or otherwise, while the SAPO’s website is a collection of pretty pictures rather than a useful business tool.

Covid protocols are virtually non-existent, especially during the peak grant payment periods, putting the health and welfare of staff and customers alike at risk. And there are no solutions in sight as executives jump ship and staff morale plummets.

It is abundantly clear this lame-duck SAPO cannot fly. Yet unlike SAA, the post office really is an essential lifeline to the outside world for many people, especially in rural or remote areas, and with the largest footprint in the country to boot.

If the SAPO is to be saved, government needs to stop talking about Public Private Partnerships or social compacts with business and actually start implementing them. For an experienced operator with capital to invest, the SAPO can work; part or complete privatisation is the only alternative to bankruptcy.

The Department of Communications needs a new Minister and the SAPO a new owner. If ever there was a moment to hang the sign “Under New Management”, that time is now.

Issued by Cameron MacKenzie, DA Shadow Deputy Minister of Communications & Digital Technologies, 15 January 2021