The financially-strained South African Post Office (SAPO) will receive income support to the tune of R381 million for its employees for the next six months, it was announced this week.
The funds will come via the Temporary Employer/Employee Relief Scheme (TERS), which is administered by the Department of Labour and Employment through the Commission for Conciliation, Mediation and Arbitration.
Parliamentary Portfolio Committee on Communications and Digital Technologies chairperson Khusela Sangoni-Diko, who has been vocal about the post office’s survival, described the approval of the funding as “a much-needed lifeline that the state is both morally and duty-bound to extend”.
“The R381 297 863.83 wage subsidy for nearly 6 000 SAPO employees over a six-month period signals an important milestone in the ongoing work to rescue, resuscitate and ultimately futureproof the post office. The subsidy is expected to reduce the SAPO’s cost burden and forms part of the building blocks towards the completion of the business rescue process,” explains Sangoni-Diko.
According to the chairperson, beyond financial, employee and operational distress, to qualify for TERS funding, applicants must present a viable turnaround strategy for the company to the adjudication committee that in the opinion of the committee has reasonable prospects of success.
As a result, she has called on the Department of Communications and Digital Technologies (DCDT) and SAPO to use the reduction of the entity’s cost burden to catalyse digitalisation, and accelerate the development and implementation of a comprehensive partnership strategy.
“This step is steadily moving us towards the end of the business rescue process, thereby presenting an opportunity for the department to accelerate the process of developing a comprehensive partnerships strategy for SAPO’s revenue generating streams,” states Sangoni-Diko.
“While the TERS funding is substantially less than the R3.8 billion the business rescue practitioners had sought to return SAPO to full solvency and liquidity, this reprieve presents strategic choices for consideration by the department on how to re-engineer our country’s designated postal operator.”
Ailing state entity SAPO has been under business rescue for over two years, facing retrenchments, financial pressure and a shrinking branch network during this time.
In February, SAPO received relief of R150 million from National Treasury to assist it to address immediate financial pressures. It also received a R2.4 billon funding allocation from Treasury in 2023.
According to National Treasury documents, bailouts cost government R520 billion from the 2008/9 financial year, to date. Treasury has maintained that government’s stance is to not provide further bailouts to state-owned entities.
With Solly Malatsi at the helm of the DCDT, the minister last year tabled his plans to reform the organisation, with the “consideration of privatisation scenarios as a preferential option”.
The Democratic Alliance’s Malatsi has long favoured the idea of public-private partnerships for some of the entities in his portfolio, previously telling ITWeb that the South African fiscus faces a lot of pressure, with Treasury making it clear that its pockets are not that deep.
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