Post-mortem for Post office
Words by: Cameron Mackenzie MP. Article from Noseweek Magazine October 2015.
Let the private sector get on with it.
Imagine SAA had a legislated monopoly on flights between Johannesburg and Cape Town, but suddenly had neither aircraft nor fuel to fly between the two cities.
The public outcry would be deafening. The media would get hysterical. As the economy ground to a halt, aviation authorities and government would take action.
So why is it that, when the SA Post Office — as essential to the economy as any transport link — doesn’t collect or deliver mail, nothing is done?
It is almost a year since the strike that brought the Post Office to its knees ended with the forced resignation of its Board of Directors in November 2014. An administrator, Dr Simo Lushaba, was appointed and tasked with turning its fortunes around. So where is this essential service today?
The Post Office Act (1998 and amended in 2011) unequivocally states that the Post Office “shall have as its main object and main business to conduct the postal services”, and the Post Office shall not cease or alter its main object or main business unless approved by the Minister after consultation with the Minister of Finance. In other words the Post Office is legally bound to render its service until decided otherwise by government.
The Post Office was granted a 25 year monopoly on parcels below one kilogram and small mail items. In exchange the corporation is obliged to meet a Universal Service Obligation (USO) requiring it to provide a presence in urban and under-serviced, mainly rural areas, and to continually improve its service levels.
Yet today, the Post Office can’t even meet the most basic terms of its licence – collecting and delivering mail. Over 40 retail post offices have been closed, or rendered unusable as landlords evict or lock them for non-payment of rent, or disconnect electricity. Post offices across the country from Colesberg and Hopetown to Virginia and Burgersdorp have refused to accept mail as they are unable to guarantee a service, because their hired delivery vehicles have been repossessed or fuel cards stopped by creditors owed hundreds of millions of rands. Even SAA hardly a shining example of a well-run state-owned enterprise itself – has stopped carrying the Post Office’s international mail shipments.
Jobs are at risk as local communities are dependent on these centres to provide a critical link for commerce and communication. Many small businesses dependent on postal services have been brought to their knees. More than 25,000 municipal accounts, for example, are waiting to be posted at the Cradock post office, which has severe implications for the cash flow of municipalities already under pressure to collect revenue.
I have recently taken up the cause of graphic artist Paul Treleven who the Post Office last year commissioned to design a commemorative stamp and cover for the World Conference on flight routes, held in Durban last month. He delivered his designs and his invoice for R6322 to the Post Office last November, and has sent an account statement every month since. But as this issue of Noseweek went to press he had still not been paid.
In explaining the failure of ICASA to hold the Post Office to account for breaching the terms of their licence, ICASA councillors revealed that no mechanism exists to measure the corporation’s performance. Thus, no action can be taken, which explains why the complaint lodged by a group of special-ist publishers is not being resolved.
At a recent meeting of Parliament’s Telecommunications and Postal Services portfolio committee, an ICASA councillor stated that action will be taken against several municipalities in the Eastern Cape and KwaZulu-Natal, which have taken matters into their own hands and arranged deliveries of accounts to ratepayers, as they have allegedly ‘Violated the Post Office’s monopoly”! It’s a case of the guilty walking free while the innocent are made to suffer.
In the meanwhile the man appointed as administrator and charged with the Post Office’s return to profitability as a “customer-centric” organisation has been rewarded for its collapse with appointment as chairman of a new board.
And what does this new board mean for the corporation? Given the critical state of the Post Office, it is shocking that there are no appointees to provide the in-depth experience necessary to turning the corporation into a profitable, efficient and reliable carrier of postal goods.
While the new directors bring fi-nancial and IT expertise as well as governance experience, there is little indication of the necessary experience in logistics, retail, e-commerce or other operations that lie at the heart of the Post Office’s main business.
The only profitable entity on the Post Office’s balance sheet is the Postbank, but with government’s stated aim of turning that into a full-scale retail bank, it’s clear the focus of the board lies here. Without Postbank the Post Office would be hopelessly insolvent and drowning in debt. It is losing more than R100 million a month as mail volumes decline rapidly – in no small measure through failure to provide a reliable and effective service.
The latest Board appointments are a clear indicator that government is not serious about the Post Office meeting its core mandate to deliver mail. It’s time to end the monopoly and allow consumers to choose a postal service that does deliver, by allowing private sector companies the opportunity to compete in the market. If the SA Post Office can’t deliver, let others do it.
Cameron Mackenzie is DA Shadow Deputy Minister of Telecommunications and Postal Services.
The new board members
Dr Simosezwe Dugmore Lushaba, chairperson – former Rand Water CEO who has served as the Ad-ministrator since November 2014 after the last board was forced to resign;
Zibuse Comfort Ngidi – an attorney who publicly and vociferously defended Zuma over Nkandla (his reward maybe?)
Bulelwa Patricia Soci, deputy chair – a chartered accountant (SA) with extensive financial services experience;
Nomahlubi Victoria Simamane – CEO of Zanusi Brand Solutions (to repair the SAPO brand?);
Mduduzi Eric Zakwe – CA (SA), IT specialist (with an eye on the Postbank, systems and processes? Goodbye Mr Postman?)
Robert Nkuna – professional advisor to Ministers (Transport and Communications), Former ICASA Councilor and MDDA Director; Dep Director GCIS;
Dr Lynette Molefi – Medical Doctor, COO of Safika Health (perhaps went to medical school with Dr Si- yabonga Cwele?);
Marion Marole – MBA, professional director including African Bank (again suggesting survival strategies revolve around Postbank rather than a postal service?);
Joel Sihle Ngubane – former SA Post Office director and IT specialist (absolutely no idea why….);
Phetole ‘Elvis’ Rabohale – ten years mail processing experience at the Post Office, till 2004; HR Executive.
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