Post Office’s financial situation is ‘seriously dire’

2014-10-15 16:14

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The cash-strapped, strike-hammered South African Post Office is on the brink of collapse.

“The financial situation of the post office is dire. It is seriously dire,” the organisation’s general manager of public affairs, Andrew Nongogo, told Parliament’s communications and public enterprises select committee.

Referring to the ongoing strikes that have crippled post office operations over the past 10 weeks, he warned that the parastatal was losing customers and money, and suggested there might not be enough to pay salaries at the end of the month.

“The fact that we are not at work right now [due to the strike], and we are losing customers, we are losing the public in general, means that there is no money – that should be coming in – that would allow us even go and continue to pay salaries on the 25th.”

Last month, there was a hiccup with the payment of salaries, which Nongogo described as an anomaly.

“That was really a serious and unfortunate anomaly that happened last month,” he said, adding that salaries were paid at the time, but a day late.

Telecommunications and postal services director-general Rosey Sekese said the post office was facing a crisis and an uncertain future.

“We acknowledge that the entity is in a crisis. If we continue, and we don’t get business and the entity operating, we fear we will have a scenario none of us would want,” she warned.

Responding to a question on the future viability of the post office, she said her department was trying to develop a sustainable turnaround plan for the entity.

“Unless we have that on the table, I really fear in terms of what would happen. Because that’s a reality we are faced with.”

On the strike, department spokesperson Siya Qoza told the committee this was ongoing and violent.

Telecommunications and Postal Services Minister Siyabonga Cwele had called on workers to return to work while issues were being resolved.

“This is primarily because we are acutely aware of the negative impacts the strike is having on all South Africans.”

The department was being bombarded with calls from those affected.

“At this stage, the response [to the minister’s call] is a bit mixed,” he conceded, adding that the strike was “an industrial action that is not protected”.

On the problems facing the post office, he said these would not be resolved quickly.

“It is quite clear that the challenges we are facing at the post office will not be resolved in one day, even in one month. It is going to take time.”

Today’s meeting was called by the committee to get an explanation from the department on media reports of irregular spending of R2.1 billion by the post office during the past (2013-2014) financial year.

Sekese said the department had been “taken aback” by the reports.

According to notes tabled by the department at the briefing, the reported R2.1 billion related to the irregular expenditure as reported for the 2012-2013 financial year, and not for 2013-2014.

Sekese suggested a “copy and paste” mistake had occurred in a document seen by the media.

“The figure was reported in the previous financial year, but the [presenter] ... did a mistake by carrying the figure that was in the previous year into the 2013-2014 presentation ... ” she explained.

The post office has yet to table its 2013-2014 annual report.

The committee also heard on Wednesday that the organisation had tapped into a surplus R400 million connected to its employees’ pension fund.

Qoza said the post office had received official clearance to do so.

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