SA Post Office on the brink of collapse

By admin
15 October 2014

The South African Post Office (Sapo) has to answer for its irregular spending of R2.1 billion during the past financial year.

The cash-strapped, strike-hammered SA Post Office (Sapo) is on the brink of collapse, MPs heard on Wednesday.

"The financial situation of the post office is dire. It is seriously dire," Sapo general manager 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 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 into Sapo -- that would allow us even go and continue to pay salaries on the 25th."

'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'

Responding to questions, he later repeated the warning.

"If we don't go to work, we don't get money in, and if we don't get money in, we come back to the same position that you are asking me about --what will happen on the 25th of this month, of next month, etc? So that's how serious the position is."

Last month, there was a hiccup with the payment of Sapo 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.

The labour and business situation at the post office meant it was experiencing "serious challenges" with regard to its finances.

"This has resulted in us having intense discussions with the National Treasury, and also with Minister of Finance [Nhlanhla Nene], in terms of how they can assist us in stabilising the finances of the entity."

These discussions were not yet concluded.

Responding to a question on the future viability of Sapo, 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."

Her department was interacting with Sapo on a day-to-day basis.

She pinned the blame for its financial situation on modern technology and mass media.

"Sixty-five percent of the revenue comes from Sapo's main business. Now this whole issue of technology is impacting massively on the SA Post Office.

The post office had to diversify to cope with this new technology, she said.

On the strike, department spokesman 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."

Wednesday'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 Sapo during the past (2013/14) 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 R2.1bn related to the irregular expenditure as reported for the 2012/13 financial year, and not for 2013/14.

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 2013/14 presentation... " she explained.

The post office has yet to table its 2013/14 annual report.

The committee also heard on Wednesday that Sapo 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.

"The figure was about R400 million... it was basically the surplus that was identified," he said.

Earlier, Nongogo gave members an assurance that employees' contributions were safe.

"I can categorically state that no monies have been taken by the post office from the pension fund... nothing of the sort has taken place," he said.

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