AFRICA & MIDDLE EAST: S Africa postal shake-up move
The South African Post Office has asked the government to cancel its strategic management contract with New Zealand Post International and the UK’s Royal Mail on the grounds that its foreign partners have not reduced the mail service’s losses.
The government has also hired Kroll and Associates, the investigative consultancy, to investigate financial irregularities in the state-owned utility.
The Post Office has continued to make heavy losses, estimated at R750m (Dollars 94m) for the year to March 2001, and relies on state subsidies which the government had intended to end this year.
The Post Office has been criticised for slow delivery, theft and nepotism. Its financial difficulties are exacerbated by deficits in its pension and medical aid funds.
Robert Nkuna, a communications ministry spokesman, said yesterday the Post Office board felt that the cost of the three-year contract, estimated at R185m, had not been matched by cost savings.
The Communication Workers’ Union has supported the board’s decision to terminate the contract.
The contract was awarded in 1999 after the government decided not to privatise the state-owned utility. The foreign management was expected to stem the losses, improve the service’s reach across the country and implement skills transfer and affirmative action policies.
