You’ve got to feel for employees of the embattled South African Post Office this Christmas. After several difficult years in business rescue, the government entity has been dealt another hammer blow this festive season. The state-owned entity was once one of the most popular ways to receive South African Social Security Agency grants. Likewise, you could renew a vehicle/driver’s licence painlessly, send and receive packages and much more. Now, the National Treasury has rejected its request for a fresh R3.8-billion bailout request …
SOUTH AFRICAN POST OFFICE THIS CHRISTMAS
In light of this bad news, SAPO has once again applied for the Unemployment Insurance Fund’s Temporary Employer/Employee Relief Scheme, reports Daily Investor. Even though this relief scheme was only originally meant to help businesses struggling during the COVID-19 pandemic. Billions in losses and mounting debt pushed SAPO into business rescue two-years ago as it came face-to-face with liquidation.
Business Rescue Practitioners in charge of the process say they have made many operational improvements to bring the entity closer to solvency. Like signing a contract with Ethiopian Airlines to provide airmail services. Similarly, a reinstatement of international mail service with Swiss Air helps deliver airmail to Europe and Japan. However, its plans were still contingent on another R3.8-billion bailout from government to keep the doors open. This is over and above R2.4 billion already proportioned in the current National Treasury budget.
FUNDAMENTAL TO MANY SOUTH AFRICANS
Kwena Molotoe, a government communications spokesperson recently said that the SAPO still plays a fundamental role in the lives of many South Africans. Especially SASSA grant beneficiaries in rural areas. This is despite the fact that it is struggling financially. And while difficult, there is a clear and workable solution to turn the post office around. The department says the South African Post Office this Christmas will continue to offer important services like communication and SASSA grants.
“SAPO plays a critical role in ensuring that so many of our rural communities aren’t left behind. We need to ensure that we get it up and running so they’re not forgotten. We’re making inroads into trying to turn around the South African Post Office this Christmas, but it is going to be an uphill battle for this administration,” said Molotoe.
Several cost-cutting measures, including thousands of employees being retrenched, have been enacted. But there are still 600 locations operational around the country. Moreover, progress has been made in improving the liquidity of the SOE, but it still hopes to find a private funding partner. “Regarding our SOEs, we must look into private-public partnerships to make them sustainable. The South African taxpayer cannot continuously bail out these entities,” Molotoe concluded.
DO YOU FEEL FOR SOUTH AFRICAN POST OFFICE EMPLOYEES?
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