Witches’ brew of woes poisoned post office finances

2014-10-17 00:00

CAPE TOWN — In the years preceding the crisis in which the South African Post Office (Sapo) finds itself currently, its profits showed a sharp decline.

On Wednesday Parliament heard from the Department of Telecommunications and Postal Services, as well as the management of Sapo, that the institution is on the brink of a collapse. The post office does not even have enough money to pay its staff salaries at month end.

The woes of the post office can be attributed to a witches’ brew of changing consumer needs led by technology, labour unrest, unstable leadership and an end to the payment of subsidies from government.

The post office’s annual report for 2010 shows these problems are not new.

In 2005 the post office showed a profit of R943,7 million before taxes. At the end of the 2012-2013 financial year the post office showed a loss of R206,9 million, according to its 2013 annual report.

It is still unclear how far the post office’s finances deteriorated in 2013-2014, as the post office has not yet submitted its annual report.

Instead, it is working with the treasury to “stabilise finances”.

“There are serious challenges with the post office’s finances,” said Rosey Sekese, director-general of the Department of Telecommunications and Postal Services. Part of the problem is that about 65% of the post office’s income comes from traditional mail. She said the post office will have to diversify.

Government subsidies had also shrunk from R306 million in 2010-2011 to R180,4 million the next year and R51,965 million in 2012-2013, with zero government subsidy in 2013-2014.

The post office is currently also suffering from an ongoing strike.

Public affairs manager at the post office Andrew Nongogo said the current and previous strikes led to large losses for the post office.

This report also shows that a number of vital top management posts are filled with acting managers. The posts include chief information officer, COO and managing director of Postbank.

Earlier this month the post office CEO Chris Hlekane, was placed on special leave, with the COO Mlu Mathonsi, acting as CEO. The chief executive for postal services Janras Kotsi, was suspended.

The post office council currently has an acting chair, Dr Hlamalani Manzini.

The Special Investigations Unit is also probing misspending of R2,1 billion, as reported in the 2012-2013 finanical year, and an unconformed R213 million in the 2013-2014 financial year.

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