Communications and Digital Technologies Minister Mondli Gungubele revealed that the South African Post Office (SAPO) will record a net loss of over R2 billion, with operational costs set to reach 200% of revenue.<\/p>\n
Gungubele\u2019s comments followed news from the Post Office\u2019s business rescue practitioners, Anoosh Rooplal and Juanito Damons, that creditors voted in favour of the business rescue plan.<\/p>\n
The plan will be implemented in two phases over two to five years and will see a much leaner organisation.<\/p>\n
The first phase involves stabilising the business by reducing the branch network to 600 branches and reducing the workforce to 5,000 employees.<\/p>\n
Gungubele said the SAPO currently has 1,023 branches, of which 894 are active. He could not say how many were profitable.<\/p>\n
Current staff will be upskilled, and additional digital specialists and leaders will be employed to assist in the modernisation and digitisation transition.<\/p>\n
\u201cThe focus will be on improving service delivery levels, which will include increasing its fleet to deliver letters and parcels timeously,\u201d Rooplal said.<\/p>\n
\u201cNew digital products will be considered and launched to increase revenue streams while automating more of the daily tasks.\u201d<\/p>\n
The second phase will implement elements of the \u2018Post Office of Tomorrow\u2019 strategy and aim to achieve the outcomes defined in the Postal Amendment Bill.<\/p>\n
The Post Office will be repurposed to provide diversified and expanded services in a modern world.<\/p>\n
These services include hybrid mail extensions, new motor licence disc solutions, increased property rental revenues or sales of owned property and the creation of a digital hub.<\/p>\n
It will also seek strategic private and public partnerships and negotiate in the e-commerce and logistics space, which will assist in future-proofing the organisation.<\/p>\n
\u201cA restructured Post Office can contribute to the financial sustainability of many large and smaller businesses due to its many procurement activities,\u201d Rooplal said.<\/p>\n
\u201cIt will also contribute to the tax-paying base and increase employment again in the future as the business grows.\u201d<\/p>\n
Commenting on the plan, Gungubele said the institution could be saved, and liquidation could be taken off the table.<\/p>\n
Gungubele told Newzroom Africa that business rescue was needed because of the Post Office\u2019s dire financial situation.<\/p>\n
\u201cWe are going on a net loss of R2 billion plus, and we are projecting a R1.7 billion loss next year,\u201d he said.<\/p>\n
He revealed that the Post Office\u2019s operational costs are around 185% of revenue and are projected to reach as high as 200%. Employee costs alone are 150% of the company\u2019s revenue.<\/p>\n
\u201cIf you listen to what I have said, if it continues, then it means we must close the South African Post Office,\u201d Gungubele said.<\/p>\n
He warned that if the Post Office is shut down, businesses reliant on its services will collapse, and millions of South Africans who rely on it will be stranded.<\/p>\n
To save the state-owned enterprise, another R3.8 billion bailout is necessary. Gungubele said this bailout is public knowledge.<\/p>\n