South African Post Office CEO battling with government

South African Post Office (Sapo) CEO Mark Barnes says the government is not keeping its promise to give the parastatal business.

The Sunday Times quoted Barnes as saying that the government “has made a commitment that 30% of its business will be with the post office”.

This has not transpired, but Barnes admits the quality of the Post Office’s services may not be “dependable, competitive, and resilient” enough to serve the government.

The Post Office recorded a R1.1-billion loss for the year ended March 31 2016, with a 9% decline in revenue.

Falling revenues and financial losses have hit Sapo hard, said chair Simo Lushaba in the company’s latest annual report.

“A number of Post Offices, 221 to be precise, were closed due to outstanding rentals; those that operated had no paper, toner, or other necessities to provide services to our customers,” said Lushaba.

“Computer systems and connectivity continued to under-perform, resulting in unacceptably high downtime for critical customer service.”

Sapo’s acting chief financial officer Nichola Dewar said revenues have come under pressure amid the value chain being hit by non-payment of suppliers and a lack of investment in new technology.

Barnes said other “primary inhibitors” for the Post Office include a lack of funding, unsettled labour agreements, little progress on the corporatisation and licensing of Postbank, and a further decline in government business.

But Barnes, who took up the Sapo CEO post in January, said progress has been made in several areas.

These include Sapo’s signing of a joint agreement with trade unions to settle previous wage issues, a R650m capital injection received in April 2016 from National Treasury, raising debt funding of R2.7bn, and investing over R1.5bn in capital projects over the next three years.

The South African Reserve Bank has also approved Sapo’s Section 13 first-level application towards a banking licence for Postbank.

Now read: SA Post Office closes hundreds of branches

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South African Post Office CEO battling with government