South Africa Post Office Wants Subsidies Continued

The South Africa Post Office is expected to ask government to continue its subsidies beyond March, having indicated that it will report another loss this year.

The organisation’s continuing financial plight is also reflected in a
request to renegotiate the management contract signed last year with New Zealand
Post International, now called Transend Worldwide.

South Africa Post Office CEO Maanda Man-yatshe said yesterday it was now
clear that the organisation would not break even by the end of March this year.
Government decided in 1999 that postal subsidies would be halted by March
this year. “We are talking to the communications department about revisiting
the issue of capitalising the SA Post Office,” Manyatshe said. The
organisation suffered an operating loss of R482m in the year to March last year on consolidated revenue of R3,7bn.

Manyatshe said Transend Worldwide had agreed to review the contract to
focus on those areas that will help turn the SA Post Office around. The
organisation needed international expertise in certain areas, notably costing,
logistics and performance measurement. South Africans could, however, handle a range of other areas such as the expansion of postal addresses.

“In the current contract, the New Zealanders are not responsible for
implementing policies, only for formulating them. This will have to be
reconsidered,” he said.

Transend Worldwide country manager Doug Maclean said the contract made
provision for certain issues to be renegotiated, broadly focused on the
type of resources that the international partner would provide. He declined to
comment on whether Transend Worldwide would be penalised due to the SA
Post Office’s failure to break even. “I can say that the contract does contain
financial penalties in some areas.”

Manyatshe said one problem was that few SA Post Office executives, or board
members, knew the contents of the contract. This disabled many postal
officials, particularly line managers, who were uncertain of the rules.

Some of the contract targets might have to be reconsidered, he said. It
would cost R200m a year to improve letter delivery times to one day within
cities, two days between cities and three days across the country from their
current two-, three- and four-day delivery times respectively.

Other factors affecting its performance included the address expansion
exercise, which was increasing costs but generally not increasing
revenues; and the fact that several provinces were using the private sector to
dispense welfare pensions.

Copyright 2001 Business Day. Distributed by AllAfrica Global Media
(allAfrica.com).