Judge lifts injunction on Brazil’s post office bidding process

A federal judge in Brazil has lifted a court injunction suspending the bidding process for hundreds of new post office franchises. The process was halted after complaints from the post office franchise operators association, Abrapost, that requiring certain certification that bidders are free of debt made it difficult for potential operators to take part.

Brazil’s Post and Telegraph Company (ECT) said that yesterday the injunction was revoked by Federal Judge Ricardo Machado Rabelo, who said in his judgement that suspending the entire bidding process had been a rather “drastic” approach to improving the process.

ECT said it now has until this September to complete the recruitment of franchise operators to extend its retail network across the country.

The postal service said it is still taking measures to improve its franchise bidding process in the light of the criticism.

“So far, 500 franchised agencies have been tendered,” ECT reported, adding that the achievement “demonstrates the acceptance of the model by the market, and the success of the Post Office in conducting a participatory and transparent process that seeks to keep the balance between the interests of the company, franchisees, and especially the Brazilian population.”

ECT opened its bidding process in December, offering 10-year contracts for 818 post office franchises, with bidders allowed to apply for up to two franchises each.

ECT has 17,000 post offices in total, but franchise operators account for about 40% of the network’s revenue.

Brazil’s national postal operator is working under new universal service obligation requirements set by the government at the start of this year, which include a requirement to have post offices in every single municipality by the end of 2012, and to extend postal services by 2015 into all 4,261 Brazilian districts that have a population of 500 or more.

The Brazilian government, under President Dilma Rousseff, is using ECT as a key tool to spread social and economic development in Brazil, with an important part of that effort expanding access to financial services and mobile telecommunications in rural areas, as well as postal services.

Last week ECT president Wagner Pinheiro de Oliveira spoke at the World Mail and Express Americas conference in Miami about the important social role of the post office network.

“We understand the importance of using the omnipresence that we have in Brazil – to use our postal agencies – to drive digital inclusion and social inclusion, and to add value to our brand,” he said.

“We are forging commercial partnerships to take products that are not available into rural areas, because they can’t otherwise reach the far-flung parts of the country.”