Telkom threatens to cut off Post Office over R269-million bill
Telkom has demanded that the South African Post Office (Sapo) settle a R269-million outstanding bill or have its networking services cut off, the Sunday Times reported.
Communications minister Khumbudzo Ntshavheni’s department intervened and asked the partially state-owned Telkom not to cut off the ailing postal service as they raised funding to bail it out.
Without connectivity, post offices around the country would not have been able to pay out millions in social grants or renew vehicle licence discs.
The Sunday Times reported that Telkom and the Post Office had discussed the debt several times, but it failed to meet its payment agreement.
Telkom has reportedly given the Post Office until the end of the month to settle its debt.
Telkom did not immediately respond to a request for comment.
Post Office spokesperson Johan Kruger said that the postal agency has paid its monthly Telkom bills in full in the past twelve months.
“There is an amount of historical debt outstanding and the Post Office is in continuous discussions with Telkom to ensure an amicable solution to this,” Kruger stated.
He said that the Post Office’s network services depend on service provision by Telkom.
“The Post Office is putting in place a programme to increase revenue, and the SA Post Office of Tomorrow Strategy has been approved,” stated Kruger.
“It has identified a number of revenue-generating initiatives, some of which are currently being implemented. It is however, worth noting that the full impact of the strategy would be realised when its implementation has the required funding.”
The Sunday Times reported that Sapo asked the government for a R9.3-billion bailout in a closed parliamentary session on Tuesday.
This is R1.1 billion more than it was asking for in September.
According to the report, the Post Office said it needed R6.9 billion to help with its immediate cash flow requirements and R2.4 billion to settle its Postbank debt.
It broke down the R6.9 billion as follows:
- R4.3 billionn — historical debt
- R1.8 billion — cash-flow deficit for nine months while revised strategy is implemented
- R400 million — capital expenditure
- R400 million — optimising staff costs (i.e. retrenchment packages)
Nomkhita Mona, Group CEO of the South African Post Office
MyBroadband previously reported that the Post Office has run up a debt of around R305 million in unpaid rentals and utility bills.
In February 2022, the postal agency owed R485 million to its suppliers.
It also resorted to intermittently withholding payments to its employee retirement fund and medical aid scheme to pay one or the other every month.
In December 2021, the Supreme Court of Appeal ruled that Sapo breached its obligation to pay R800 million in retirement contributions to the Post Office Retirement Fund, going back to May 2020.
In September, the Post Office was R600 million in arrears with staff medical aid contributions to Medipos.
Cliffe Dekker Hofmeyr legal experts warned that Sapo’s use of employees pension and medical aid contributions to pay off other debts could have severe financial and criminal consequences for its board of directors.
To raise money, the Post Office has resorted to auctioning off properties in areas where few people are still renting post boxes.
However, if the properties all sold for the reserve prices listed, the Post Office would only raise around R23 million.
Parcel delivery monopoly
The Post Office is also embroiled in a legal battle with South African courier companies.
Industry regulator Icasa ruled that Sapo has a legally protected monopoly on delivering parcels under 1kg, excluding food, which the postal service wants to enforce.
Ecommerce giant Takealot recently joined the case against the Post Office.
Based on an “Expression of Interest” process the Post Office held with courier companies last year, it has no intention of handling all sub–1kg deliveries in South Africa.
Instead, it wants to appoint couriers as its agents, and charge them an “agency fee” for the privilege.
The South African Express Parcel Association recently told MyBroadband that the court is only likely to hear the case in 2023.
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