The DA has today written to the Chair of the Postal Services and Telecommunications Committee, Mmamoloko Kubayi, calling for an urgent Parliamentary review of the South African Post Office’s business model.

We believe the sustainability of SAPO in its current form needs to be revised given the extent of the financial collapse revealed by the entity’s annual report for the year ended 31 March 2014.

The report shows an organisation in a state of terminal decline:

1. the entity reported nearly R359-million in losses as a result of the recent four-month strike which saw many customers finding alternative ways of sending and receiving post
2. the increasing adoption of electronic and courier services by disgruntled customers will erode revenue even further, with SAPO projected to lose a further R1,3-billion in the current year
3. the entity is technically insolvent leading to late payment of salaries and branch closures due to rentals not being paid

To date, the SA Post Office has not been able to submit a turnaround plan to the portfolio committee.

The DA believes a new business model is required for SAPO to make the entity more viable.

A new model needs to involve the outsourcing of services to logistics companies, increasing the use of cellphone payment services, establishing partnerships with commercial enterprises that operate in rural areas, and using Post Offices as integrated service delivery points.

Just like SAA, the SABC, Eskom and other parastatals in paralysis, South African taxpayers cannot be expected to subsidise an inefficient and unprofitable business model indefinitely.

 

Issued by DA