South African Post Office faces dispute over hike
THE SA Post Office was locked in an urgent industry meeting last night to thrash out differences over a proposed 12% to 15% increase in postal tariffs which has outraged a host of big and small mail users.
The SA Post Office is the third state-owned organisation, after Telkom and Eskom, to apply for an above-inflation tariff hike for this year, placing further pressure on SA’s inflation targets.
SA Post Office senior GM Bernard Magabe said yesterday the average increase was 12% at most. This could push the current R1,40 cost of posting a standard letter to R1,57. The Post Office’s licence restricts annual postal increases to the consumer price index (CPI), projected at 3% to 6% this year.
The Direct Marketing Association (DMA) said the proposed increase was closer to 15% and was “grossly unfair”. The association is fighting the hike, having urged the communications minister to enforce the terms of the SA Post Office’s licence.
The DMA also claims a number of business rebates and discounts are being withdrawn. Magabe said the rebates and discounts were being standardised rather than withdrawn.
Magabe said there were several reasons the SA Post Office had applied to the regulator for an above-inflation tariff increase.
Two of the company’s biggest costs were the transport of mail and labour, with the cost of petrol having increased significantly. “It is difficult to keep the tariff increases within CPI when these costs are rising so sharply.”
The SA Post Office has in recent years recorded big losses, among the biggest being last year’s R850m although there are indications that it significantly reduced this loss in 2001-02.
Davy Ivins, DMA executive director, said it was “grossly unfair and an administrative injustice” to transfer the Post Office’s financial problems to its clients when the company had done little to reduce its internal costs. Ivins said the long-term effect of the price increases would be to drive away postal business and entrench the decline in mail volumes. In the short-term it would only cement the continued loss of business.
On the Post Office’s argument that transport costs had risen dramatically the DMA maintained that the cost was a component of CPI and the Post Office could not consider only one element of the CPI basket in isolation.
The DMA called for yesterday’s meeting, claiming postal management had failed to discuss the price increases with industry bodies. A statement on the outcome of the meeting is expected today.
The DMA called for yesterday’s meeting, claiming postal management had failed to discuss the price increases with industry bodies. A statement on the outcome of the meeting is expected today.
by Robyn Chalmers
