Israel Ministerial Committee approves proposed postal law

The Israel Ministerial Committee on Legislation has approved the proposed postal law, which is due to turn the Postal Authority into a more flexible and competitive state postal company.

Committee chairman Justice Minister Yosef Lapid called the agreement “historic.” The bill will be sent to the Knesset for a first reading. The postal law will replace the Postal Authority Law that was legislated in 1986, and the new company will be launched on January 1, 2004.

Postal Authority chairman and director-general Yossi Shelli demanded that all the authority’s assets be transferred to the company to ensure that it can meet all the demands on it. He also insisted that the company not be established until the signing of a new collective agreement setting down the terms of employment of the 4,800 tenured workers moving to the company. Shelli asked the members of the ministerial committee to provide a detailed list of the new services that the justice and communications ministers will allow the the company to provide. The ministers did not make promises, but these demands will be discussed during the Knesset’s deliberations on the bill.

The law sets down stages for the opening of postal services to competition. At present, 22 percent of the market is open to private companies (including mail weighing under 20 grams and all overseas mail). On July 1, 2005, 20% to 30% of the market that is a postal company monopoly will be open to competition, according to the bill. This will include bulk mail services for business clients (but not government and other public organizations). Two years later, another 45% to 50% of the company’s monopoly will be open to private competition, and in July 2009, 65% to 70% of the monopoly will be exposed to competition. On July 1, 2010, the communications minister will be entitled to issue general licenses for all types of postal services that are the same as the license by which the postal company will operate.

The new postal company services are aimed at providing a source of income to compensate the company for having to deliver mail at a uniform charge to all Israeli residents, wherever they are. Post offices, which see some 70 million customer visits a year, hope to expand the services they offer, which include banking, the sale of various cards, services for insurance companies, customs services, and updating of addresses for various bodies.