Malta Post: Third past the post

Malta has just joined Germany and the Netherlands as the third EU member state to fully privatise the postal service. James Debono examines the implications

Privatization has always been something of a hot potato in Malta: more so in the case of the national postal service, whose previous partial privatization resulted in a nosedive in service standards and a disaster for consumers.

So it is surprising that support for the company’s total privatization now comes from the same trade union which in the past had wrestled with former major shareholders, New Zealand company Transend.

Union Haddiema Maqghudin general secretary Gejtu Vella thinks that the total privatization of MaltaPost will bring to an end a “10-year trauma” for postal workers.

Vella regrets that MaltaPost had to pass from a turbulent decade in which it was first turned in to a public company in the mid 1990s, only to revert to a government department in 1998 and to be partially privatized in 2002 when New Zealend state company Transend bought an equity share.

The UHM, which went on the warpath when Transend tried to downsize the number of postal workers, is satisfied by the job guarantee given by Maltapost’s new owners. Maltapost has now promised not to dismiss any worker except for disciplinary proceedures and normal retirement.

Vella attributes the difficulties facing the postal sector worldwide to the arrival of the internet. “With the arrival of internet, postal services have declined. That is why it makes a lot of strategic sense to have a bank which is not only involved, but is a major shareholder. In this way the post office infrastructure will also offer banking services.

Gejtu Vella is also confident that the involvement of a reputable bank will ensure that the new company will survive the European-wide liberalization of the sector in 2010. “We were never against liberalization as this favors the consumer. The fact that Maltapost will diversify its activities is the way forward to beat potential competition.”

Although the EU commission wants the sector to be liberalized by that date, the EU does not impose the privatization of postal services, which are still deemed an essential service.

Postal services in Europe remain largely in public hands, although there has been a movement towards the liberalization of these services with the United Kingdom and social democratic Sweden taking the lead.

In July a large majority of MEPs voted to remove postal monopolies in EU Member States by 31 December 2010: two years later than the 1 January 2009 proposed by the European Commission.

Full market opening implies that national operators will no longer have a monopoly on mail below the maximum weight of 50 grams, as they have at present.

It was also decided that for new Member States, especially those with a small population and a limited geographical size, the deadline for the opening up of the market will be two years later, i.e. 31 December 2012, to allow extra time to find ways to maintain a universal service.