Why does the government waste money on the Post Office?

2014-09-29 14:12

In February 2014, President Jacob Zuma issued a proclamation to enable the Special Investigations Unit (SIU) to investigate allegations of corruption at South African Post Office (SAPO), a parastatal falling under the jurisdiction of the Department of Telecommunications and Postal Services. The SIU was to investigate allegations of irregularities relating to the recruitment, selection and appointment of officials or employees of the SAPO as well payments which were made by the SAPO to fictitious officials or employees. Again in July this year, President Jacob Zuma directed the Special Investigating Unit (SIU) to investigate issues relating to maladministration and alleged corruption in a number of government departments, entities and two municipalities, one of which was SAPO.

In August 2014, a complaint was lodged to the Public Protector to probe the matter of the appointment of Thuthukile Zuma as Chief of Staff in the Department of Telecommunications and Postal Services. The young Miss Zuma received the appointment in May this year amid speculation of gross irregularities, among them, her lack of experience for the role. The department defended the appointment arguing that, a political appointee need not meet some of the prerequisites as the selection was left to the discretion of the minister, in this instance, Dr Siyabonga Cwele. Furthermore, the department were satisfied with Miss Zuma's qualifications and competencies. Miss Zuma had been under Minister Cwele’s wing in Department of Defense before his appointment as Minister of Telecommunications and Postal Services in May this year. Though the Public Protector declined to investigate the matter, one can understand that Thuli Madonsela has her hands full, dealing with such issues as quashing the CIA agent accusations among other things.

With the question of competency still begging to be answered, less than half a year into Miss Zuma’s appointment, many individuals and businesses who rely on the Post Office to deliver mail and parcels within the country and beyond our borders are losing millions as a result of the strike that has been going on for eight weeks. Furthermore, the strike also means a loss of revenue for SAPO and the losses will be bankrolled by taxpayers when the National Treasury foots the bill. In 2013, a strike by workers resulted in losses amounting to R103 million. The irony is that, while on the one hand SAPO employees demand higher wages, ghost employees receive a salary every month.

SAPO’s profit in 2012 was R158?million and that’s after using R323 million’s worth of subsidies from government. At the end of the 2013 financial year, SAPO’s loss increased to R179 million and the prospects of a profit at the end of 2014 for non-existent with losses from the ongoing strike in the region of R150 million to date. With no resolution is sight, the losses brought about by the strike could potentially escalate beyond the R200 million mark.

Asked when the strike would end, Group Corporate Affairs at SAPO, Lungile Lose responded, “I don’t think this is a time-(frame) issue. We can’t meet all the demands because of affordability.The last published (financial) statements showed a loss. This will be the third year of losses after seven years of profit,”

Post offices generate revenues of R73 million but have an operating cost structure of R473 million resulting in a loss of R400 million per annum. The effects of the strike are not only short term but, but the recurring pattern has caused loss of goodwill, forcing businesses and individuals to opt to have parcels and documents couriered by private companies.

A matter of concern is the lack of action on the part of the minister who has not been very vocal about the matter or at least from an observer's perspective. In his maiden budget speech as Telecommunications Minister, Dr Siyabonga Cwele, requested R1.59-billion for his department. He said SAPO boasts of 2 433 outlets of which 1 763 are located in rural areas thus providing a multiplicity of services to the marginalised communities. He also mentioned his directive for SAPO to develop an overall turnaround strategy which is to be finalised by the end of November 2014.

With just over two months to go before the Minister and his Chief of Staff to live up to their promise to streamline operations at SAPO, we can only hope that parcels trapped in the system will find their way home soon. Furthermore, the new minister and his staff have to prove whether the R1.59 billion requested is justifiable in relation to the services rendered by the department. While in essence SAPO can be a viable entity and is desirable public service, one wonders whether it is worth to continue footing the bill or to consider going semi-private.

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