NZ Post paid SA Post Office 'millions'

Embattled State-owned enterprise New Zealand Post has admitted paying millions of dollars in penalties to the South African Post Office after its overseas venture went sour last year.

The admission came as top NZ Post executives were hauled before Parliament’s finance and expenditure select committee for a third time to answer claims the company misled MPs about the existence of a damning report into its dealings with the South African Post Office (Sapo).

The Kroll report, ordered by the South African Government, claimed NZ Post subsidiary Transend had misled the Government to win a contract to restructure that country’s postal system.

The $54 million contract was cancelled in June, half-way through the three-year project.

The Kroll report said Transend’s handling of the South African project was disjointed, unco-ordinated, in disarray, and based on unrealistic budgets.

In November, NZ Post, in response to a written question from the select committee, claimed it did not have a copy of the Kroll report. It was subsequently revealed the company had had a draft copy of the report since July.

NZ Post chief executive Elmar Toime told the committee yesterday that the document in NZ Post’s possession was “no more than a working document”.

“If the written reply to this committee has been perceived as innaccurate in any way I express my regret that has occurred,” Mr Toime said.

But he said NZ Post remained adamant it did not have, and never had, a copy of the Kroll report.

Mr Toime said “some millions of dollars” had been paid in contract penalties, but NZ Post had made provision for this during the two years it spent in South Africa.

Mr Toime said the over-all South African venture was profitable, although he was unwilling to release commercially sensitive details. He said Sapo had paid NZ Post “millions of dollars” as part of a confidential settlement when the contract was terminated.

NZ Post also released its version of the Sapo affair to the committee. NZ Post says the new chief executive, Maanda Manyatshe, abandoned the social objectives laid down by the South African Government in favour of achieving financial success, and then refused to allow NZ Post to renegotiate its contract.

The company also says delays in appointing a chief executive, inept human resources practices, strikes, and inaction by the South African Government made it impossible for it to meet its performance targets.

* NZ Post has again revised down its estimate of the number of Kiwibank branches that will be open by the end of May. Initially NZ Post said 300 branches would be open, then revised that down to between 250 and 300.