SAPO leaves creditors in the lurch

15 July 2015

In response to a written Parliamentary question, the Minister of Telecommunications and Postal Services, Dr Siyabonga Cwele, has revealed that the SA Post Office (SAPO) owes almost R245 million to more than 2 000 suppliers, and is in arrears of over six months. 

The SAPO is using its suppliers as a second overdraft to float its negative cash flow.

A further 879 creditors remain unpaid for over 60 days, with 1 804 unpaid for more than 30 days. This total amount owed to creditors for more than 30 days is unclear, but what is apparent is that this amount is much more than the organisation’s total current overdraft facilities at commercial banks, meaning that the SAPO cannot pay its current debts.

Reports are also surfacing of post offices closing due to non-payment of rent and once again, payment of SAPO employees’ salaries is now in arrears, specifically at the courier and freight group which includes XPS, PX, Speed Services and Docex. 

The SA Post Office Strategic Corporate Plan tabled before the Telecommunications and Postal Services Portfolio Committee in May 2015 highlighted that the SAPO was not generating positive cash flows. To this end, the short-term overdraft of R270-million was maintained, with further borrowings of R1.2 billion guaranteed by government. 

That SAPO creditors, many of which are small and medium sized enterprises, are used to render services, which then remain unpaid for, is unconscionable. Business owners and their employees depend on the timely payment of accounts for services rendered, and the SAPO failure to meet this obligation means smaller suppliers will simply go out of business. 

For a state-owned company to take advantage of its suppliers in an attempt to float its negative cash flow and to use its suppliers as what is effectively a second overdraft is irresponsible, morally and ethically reprehensible. In fact, for SAPO to continue contracting services from suppliers with the full knowledge that it will be unable to meet its contracted payment terms is reckless trading. 

Since the SAPO Board was forced to resign in November last year, and Dr Simo Lushaba appointed as the Administrator at a contract price yet to be disclosed (a written question submitted on the 7th June 2015 has yet to be answered), the SAPO Board positions remain unfilled, in spite of the Ministers assurances two months ago that he was “on the point” of announcing these appointments. SAPO is currently leaderless and cashless.

While state-owned companies can turn to government for tax-payer funded bailouts or loan guarantees, the small businesses SAPO owes money to in the private sector have no such luxury. They are largely dependent on securing credit lines from commercial lenders, often at punitive interest rates, in order to keep their businesses afloat.

In an economy where more than 450 000 jobs have been lost this year, government talks of small business development, growth through the SMME sector and reducing unemployment, while the fact is that by neglecting to pay its suppliers, thousands of jobs are placed in jeopardy.

It is simply unfair that small businesses suffer due to the non-payment for their services rendered. 

I have today written to the Chairperson of the Portfolio Committee on Telecommunications and Postal Services requesting that, at the first opportunity, the Minister and the SAPO Administrator appear before Parliament to detail the extent of the current financial crisis in the SAPO. 

The Minister must also explain why the SAPO Board posts remain unfilled and what steps are being taken to provide much-needed leadership at the head of this essential entity. 

The Democratic Alliance further calls on the Minister to ensure that the SAPO take immediate steps to settle all outstanding amounts over 90 days, and provide the remaining creditors with a definitive undertaking as to when their accounts will be settled. This undertaking is the least the SAPO can do.

Statement issued by Cameron MacKenzie MP, DA Shadow Deputy Minister of Telecommunications and Postal Services, July 15 2015