Indian postal dept revamps network

FACED with a huge budgetary deficit, the Department of Post has rejigged its postal network, affecting nearly 400 loss-making post offices across the country

While 30 post offices have been closed, 172 have been merged with a bigger post office. Another 123 offices have been downgraded and 56 have been relocated to more lucrative areas

“The move is in line with the 10th Five Year Plan that requires the department to rationalise its network and optimise its resources with a view to achieving financial self-sufficiency while continuing to fulfil its universal services obligation,” said a Ministry of Communication official

Though the number of post offices restructured is very small compared to the base of 1.55 lakh post offices in the country, the postal department has taken a decision to merge or relocate more such post offices

Officials said closures were carried out only in cases of heavy financial loss or availability of another post office in close proximity. Of the 30 post offices that have already been closed, there were also cases of poor accommodation and submersion of localities due to dam construction. Officials said downgrading was done to bring the status of the post office on a par with its workload. The Government has also roped in global consultants KPMG to prepare a report on restructuring the postal network across the country. The mandate given to KPMG includes identifying new areas of business. The idea behind this corporate restructuring is to wipe out the Rs 1,400-crore deficit of the Department of Post. KPMG will also review the pricing of postal products and services and the sustainability of loss-making and unpopular products

At present, the postal network has 40 products and services a number of which, such as mail services, have become obsolete with the availability of faster and more cost-effective modes of communication

KPMG has been told to assess the postal services in terms of their utility, viability and pricing and to suggest ways to reengineer the existing products. The Government has asked the consultants to specify a corporate strategy to take on competition

KPMG will also review the existing organisational structure, the communication systems, the performance accountability system and measures for Human Resource development. The DoP has also sought permission from the Government to become a bank

Thomas K. Thomas Copyright 2005 Business Line