Communications minister Solly Malatsi has made moves to privatise the troubled South African Post Office (SAPO), which is facing liquidation.
Malatsi today announced he has sought National Treasury’s support in forming a task team to pursue private financial and operational partners for the organisation.
“This will enable serious consideration of privatisation scenarios as a preferential option to further funding from the fiscus,” the minister says in a statement.
“The goal is to modernise SAPO’s operations, drive innovation and increase its competitiveness,” he adds.
The Democratic Alliance’s Malatsi was appointed communications minister in June under the Government of National Unity.
Once considered a key institution, mismanagement, staff retrenchments and inadequate investment in IT systems brought the post office to its knees.
The state-owned entity, which is under business rescue, has been in dire financial straits and its once wide branch network has significantly shrunk over the years.
Despite receiving the full R2.4 billon funding allocation from National Treasury in 2023, SAPO requires a further R3.8 billion, in order to fully implement the approved business rescue plan.
Last month, the Portfolio Committee on Communications and Digital Technologies in Parliament called on Malatsi to urgently establish a ministerial intervention team to SAPO.
“It’s clear that any allocation of previously committed funds to the post office will be based on a revised business plan by the business rescue practitioners that meets Treasury’s expectations,” Malatsi says.
“In addition, we will work to ensure there is accountability for failure to meet previous conditions that were imposed for the financial support the post office received from the fiscus. It is with the goal of an innovative and competitive post office, that it would be strategic to look into its current exclusive licence on reserved postal services.”
According to the minister, the focus is on fostering an open, competitive environment that promotes innovation and service excellence.
He points out that this comes at a time when postal services are transitioning away from monopolies.
The preferred outcome is for SAPO to get back on its feet by regaining the public’s trust, including public entities, not through compulsory use of its services, he adds.
“Furthermore, retrenchments or withholding of salaries should be avoided, as SAPO is already facing difficulties in attracting talent and maintaining employee morale. There has already been necessary but aggressive downsizing. A motivated and stable workforce is essential to the success of any recovery plan.
“Lastly, the Universal Postal Union is an important resource with regards to postal service reform. I will ensure we are drawing in and make full use of available expertise and global best practice.
“As the newly-appointed minister of communications and digital technologies, I am committed to exhausting all reasonable avenues to make the post office financially sustainable. It is uniquely placed to leverage integration with other state entities for enhanced services to the public, as well as providing affordable postal, courier and digital services to otherwise excluded or underserved communities,” he concludes.