South Africa Post Office gets its house in order

The SA Post Office is slowly picking up the pieces after a year filled with controversy.

New chairman Vuyo Mahlati said this week that the Post Office was in the process of a major overhaul, from corporate culture to tender processes and a “brand recovery”.

It will also spend R800-million to R900-million a year on infrastructure investment.

Through a geographical information system, the Post Office is giving rural citizens postal addresses for the first time. According to the 2001 census, SA had 11.2 million households. Of these, only 4.1 million had street addresses, giving 63% of households no addresses.

The Post Office is recovering from a period of intense controversy following the suspension and later firing of former chief executive Khutso Mampeule, his criminal proceedings against his predecessor, Maanda Manyatshe, and a government-initiated forensic audit implicating a number of people in top positions at the parastatal. This includes the current acting CEO, Motshoanetsi Lesoka, and acting chief financial officer Nick Buick.

The outcome of further investigation into the results of the SizweNtsaluba forensic report is being submitted to cabinet. In the meantime, “we are comfortable with them [Lesoka and Buick] continuing to work”, Mahlati said.

The Post Office was served with a summons by Manyatshe for R270-million for money he says he would have earned had he kept his job at MTN. He resigned from MTN following allegations of corruption while at the Post Office. Mahlati said she was not able to discuss the merits of the case.

Mampeule, who was appointed to follow Manyatshe from June 2005, was suspended in November and officially removed from his executive and board positions in May. Mampeule, who considered himself a crusader against corruption, believes he was forced out while Communications Minister Ivy Matsepe-Casaburri has said he was relieved of his duties due to a breakdown of trust between him and his board.

Mahlati said Mampeule had taken the Post Office to the Commission for Conciliation, Mediation and Arbitration, and the case had been referred to the Labour Court. She stressed that his exit was a termination of his contract, not a dismissal.

A lot of the change at the Post Office is at the stage of committees and advisers. This includes looking at corporate governance, tender processes and systems and controls.

Mahlati said tender processes had been “a real problem — in terms of procurement and recruitment”.

“We have looked at policy, procedures and structures, and at this stage, we are looking at a total overhaul.”

Lesoka said the Post Office had not invested sufficiently in infrastructure, and would do so now.

She said the company was not just a postal service, and was focusing on financial services through Postbank as well as logistics, in which there had been a significant turnaround this year.

Even in the traditional business, it had embraced technological change and was offering electronic billing services and other tech-related services. The Post Office had also experienced increases in revenue and volume ahead of international averages in its core postal business.

The organisation spent R500-million this year on post offices and buildings as well as systems.

Buick said that a few years ago the Post Office’s liabilities exceeded its assets by R1-billion, and it was losing hundreds of millions of rands each year. But it had increased its profit for a number of years now. Its financial results will be announced this week.

He said the utility needed to invest R800-million to R900-million a year.

It has addressed a pension liability of R2.3-billion, bringing it down to R900-million. It is also debt free.

The Post Office receives about R300-million a year from the government, but this is largely to fund its universal service obligation and has also been used for targeted projects. The balance of its funding requirements come from its own cash flow.

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