Communications Minister Solly Malatsi’s proposal to privatise the cash-strapped South African Post Office (Sapo) has left parliament’s oversight committee and organised labour ruffled.
On Wednesday, the minister revealed seeking National Treasury’s support in forming a task team to pursue private financial and operational partners for Sapo.
“This will enable serious consideration of privatisation scenarios as a preferential option to further funding from the fiscus,” stated Malatsi.
Malatsi’s announcement comes after the Post Office, during the time of his predecessor Mondli Gungubele, retrenched more than 6 000 workers in April due to cash-flow problems.
In August, the Post Office Retirement Fund informed workers that they will forgo R1.3-billion – which amounts to 88% – of their hard-earned retirement funds.
“The goal is to modernise Sapo’s operations, drive innovation, and increase its competitiveness,” said Malatsi in a media release this week.
“It’s clear that any allocation of previously committed funds to the Post Office will be based on a revised business plan by the business rescue practitioners who meet Treasury’s expectations,” he said.
Malatsi said in addition, the department would work to ensure that there was accountability for failure to meet previous conditions that were imposed for the financial support Sapo received from the fiscus.
“Furthermore, retrenchments or withholding of salaries should be avoided, as Sapo is already facing difficulties in attracting talent and maintaining employee morale.
“There has already been necessary but aggressive downsizing. Now, a motivated and stable workforce is essential to the success of any recovery plan,” he said.
Malatsi said he was committed to exhausting all reasonable avenues to make the entity financially sustainable.
“It is uniquely placed to leverage integration with other state entities for enhanced services to the public, as well as providing affordable postal, courier, and digital services to otherwise excluded or underserved communities,” he said.
The chairperson of the portfolio committee on communications and digital technologies, Khusela Sangoni-Diko, opposed the privatisation plan.
“While the committee strongly believes that strategic and value-creating public-private partnerships are of critical importance to ensure a sustainable post office, it is, however, extremely concerning that minister Malatsi’s statement seems to suggest a foregone conclusion that entering into such partnerships must equate to the ‘privatisation’ of the post office,” she said.
Sangoni-Diko asserted that the Post Office had to remain a state entity, not beholden merely to commercial interests but committed to delivering on its universal services obligations espoused in the Postal Services Act of 1998.
Labour federation Cosatu said calls to privatise or liquidate the Post Office must be abandoned.
“In spite of promises made by the business rescue practitioners of a plan to turn Sapo around, things have gone from bad to worse, with over 200 branches closed and some simply abandoned to vandalism and criminals, and up to 6 000 staff retrenched in an economy with a 42% unemployment rate,” said Cosatu parliamentary coordinator Matthew Parks.
He noted that the sixth parliament passed legislation to allow Sapo to enter the lucrative courier sector.
This would also make it a one-stop shop, where citizens can apply for a variety of government services as well as to allow the Postbank to become a fully fledged commercial and retail bank.
“If given a chance, these two critical legislative interventions will reposition Sapo and Postbank and enable them to thrive,” said Parks.
He said Treasury needed to provide the post office with necessary financial relief as provided for in the national budget.
“Government at all levels, from national to province to local, from entities to state-owned enterprises, need to use Sapo and Postbank as their institutions of choice for their postal and banking services,” he said.
