Post Office in ‘survival mode’

2014-06-08 15:00

Internal emails seen by City Press have provided a glimpse into the dire financial situation at the SA Post Office (Sapo).

In one email, a management representative says the group has reached “survival mode”.

“As you are all very aware, the financial position of the Sapo Group is dire – in a phrase, it has reached ‘survival mode’,” the email reads.

Dated May 22, it continues: “Yesterday, at an emergency workshop, the Sapo management team had to trim the current budget by R850?million.

It was not fully achieved as yet, but the concept of doing more with significantly less is now a brutal reality for Sapo.”

The email goes on to say that no new vacancies will be filled and any IT contractors’ services have been suspended.

This decision will be reviewed every three months.

The email urges workers to cut costs such as printing, telephone calls, stationery, travel and other sundries such as tea and coffee.

It says there has also been no decision on salary increases for this year, which has drawn the ire of some employees.

According to Communication Workers’ Union spokesperson Matankana Mothapo, the union did not agree with certain aspects of the offer and negotiations were continuing.

In another email, workers expressed their unhappiness at the CEO’s decision to rehire 588 dismissed workers, saying they suspected the workers were rehired at a higher cost. This meant staff would not get an increase.

The workers were dismissed after a four-month strike last year that cost the company R100?million. But they were brought back by CEO Chris Hlekane after union intervention.

The parastatal’s poor financial position has raised fears among employees that job cuts could be looming.

In its annual report for the year to March 2013, the Post Office reported an operating loss of R206?million – from a profit of R250?million in 2012.

CEO Chris Hlekane described it as a “challenging year”, borne out by lower mail and courier volumes, labour unrest and the loss of the SA Social Security Agency grant payout business.

The strike just made things worse.

Hlekane also mentioned the prospect of the phasing out of the government subsidy. Government put in R51.9?million in that financial year, according to the annual report, although Hlekane was quoted in a radio interview later last year saying it had received state funding of R481?million.

“Undoubtedly, the removal of the subsidy weakens our financial situation, as we remain obligated to deliver on our universal service commitments,” he said.

In response to questions this week, group executive of corporate affairs Lungile Lose did not comment on the content of the emails but released a statement saying only: “Sapo’s financial projections indicate it can expect a financial loss for the 2013/14 financial year and for that reason the company is implementing austerity measures to contain costs.

“Various options to achieve the required cost containment have been considered and are being implemented at this stage.”

But according to Mothapo, the company was in this position because of many years of financial maladministration, including a controversial R425?million lease deal on a building in Centurion.

He said: “The Post Office was supposed to cut costs a long time ago. [They] left their own building and leased a building in Centurion, which was a lot of money. We complained to the Public Protector about the procurement processes to get that particular building.

“We have complained about corruption. We have complained about maladministration. We have complained about nepotism at the Post Office. We have complained about the collapse of the Post Office?...”

Earlier this year, President Jacob Zuma tasked the Special Investigating Unit to look into the allegations of maladministration, improper conduct by officials and unlawful spending of public money at the Post Office. It was also expected to investigate payments to ghost employees.

Mothapo said management should engage with the union on the financial woes at the Post Office, but retrenchments were not an option. “We need stability at the Post Office, not retrenchments. Those people who are leading the Post Office must make sure there is stability and turn around the Post Office.

“Their role is not to retrench workers. If they do that, they will meet us on the streets,” he said.

The union had not yet spoken to the new minister of telecommunications and postal services, Siyabonga Cwele, but would meet him soon to raise the issues, he said.

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