Lifeline to save the SA Post Office

The Temporary Employer/Employee Relief Scheme (Ters) will provide the South African Post Office (Sapo) with six months of income support for its staff, totalling R381 million.

The chairperson of the Portfolio Committee on Communications and Digital Technologies, Khusela Diko, described the approval as “a much-needed lifeline that the state is both morally and duty-bound to extend.”

The Post Office is arguably the country’s oldest institution. Its history shows that the first post office in South Africa was formally opened in March 1792.

According to university researcher Hans Ittmann, the opening was the beginning of what became Sapo.

Diko said the recently approved Ters subsidy will support nearly 6,000 Post Office staff.

“The R381,298,863.83 wage subsidy for nearly 6,000 Sapo employees over a six-month period signals an important milestone in the ongoing work to rescue, resuscitate, and ultimately future-proof the Post Office,” Diko said in a statement.

She added that the funding is expected to reduce the state-owned entity’s cost burden and forms part of the foundation for completing the business rescue process that began in September 2023.

Diko explained that, for an organisation to qualify for Ters funding, it must present a viable turnaround strategy to the Adjudication Committee, which the committee believes has reasonable prospects of success.

The portfolio committee chair has called on the Post Office and the Department of Communications and Digital Technologies to use the opportunity to catalyse digitalisation.

She also urged the entities to accelerate developing and implementing a comprehensive partnership strategy and consider opportunities to reinvest in Sapo’s assets and infrastructure.

“This step is steadily moving us towards the end of the business rescue process, thereby presenting an opportunity for the department to accelerate the process of developing a comprehensive partnership strategy for Sapo’s revenue-generating streams,” said Diko.

She noted that the Ters funding is significantly less than the R3.8 billion Sapo’s business rescue practitioners, Anoosh Rooplal and Juanito Damons, had sought to return the Post Office to solvency and liquidity.

It should be noted that the Post Office’s business rescue practitioners also applied for Ters funding twice in the recent past, with the first application being rejected in May 2024.

They applied again in December 2024. It is unclear whether this second application resulted in the recently secured Ters funding.

This approval of Ters funding comes after the National Treasury approved a last-minute virement of R150 million for Sapo in February 2025.

According to the Department of Finance, the funds were intended to alleviate the Post Office’s immediate financial pressures.

“This support is crucial in ensuring the Post Office meets its obligations to employees and continues delivering essential services to the people of South Africa,” it said.

Not the R3.8 billion Sapo was promised

In September 2024, Deputy Minister of Communications and Digital Technologies Mondli Gungubele revealed that the government had committed to funding Sapo’s business rescue with at least R3.8 billion.

Although he noted that the Post Office had received a R2.4-billion bailout in recent years, the deputy minister said that amount was allocated without government anticipating Sapo’s potential liquidation.

“Government committed to fund that rescue for no less than R3.8 billion. Already at that time, R2.4 billion had been allocated not in anticipation of liquidation,” said Gungubele.

“R3.8 billion is what is still being discussed with Treasury, which the government made an undertaking to do.”

This came after business rescue practitioners Rooplal and Damons revealed that the Post Office requires an injection of R3.8 billion to implement its business rescue plan.

It warned that if it didn’t secure the funding, it would run out of money in October 2024.

South African Postal Workers Union general secretary David Mangena said he believed Sapo could be rescued if it secured the funding the government promised.

He said that while implementing the business rescue process, a court order specifically mentioned allocating R3.8 billion for Sapo.

“In that court order, the R3.8 billion was mentioned. So, our understanding was that it was an order of the court,” said Mangena.

“They can’t say today that now the BRPs are raising issues to say they are running out of money. This is something that was supposed to be done in the first instance.”

He added that there had been marked progress within the entity since the business rescue process commenced.

“The Post Office can be resuscitated,” Mangena said.