The opposition Democratic Alliance has warned that the government will need to seek private investors for the South African Post Office (SAPO), or risk closing it for good.
The DA cited the SAPO’s net loss of R591 million for the second quarter of the 2021/22 financial year which was revealed during its financial presentation to the parliamentary portfolio committee of digital communications this week.
The report also shows that the SAPO owes the Post Bank approximately R2.2 billion.
“While the ANC government has an unhealthy resistance to any private takeover of state entities, it cannot continue to hold on to the Post Office for sentimentalism. It has become clear the SAPO has an urgent need for private sector investment to save it from collapse beyond resuscitation,” the DA said.
“It makes no sense whatsoever for the ANC government to persist with full ownership of the Post Office while it has consistently proven incapable of being profitable to fulfil its basic mandate of delivering sustainable and reliable postal services to the public.”
Given the historic unprofitability, inefficiency, and ongoing decay of the Post Office, no amount of nostalgic state control nor recycled bureaucratic turnaround strategy will transform the entity into a modern, functional and reliable postal service that will regain the public’s trust as its postal services of choice, it said.
The DA said will continue to leverage every parliamentary recourse to advocate for the partial sale of the Post Office to the private sector to save millions of rands on bailouts and return the entity to its previous efficiency.
Offer to buy
Former South African Post Office chief executive Mark Barnes has offered to buy a portion of the embattled mail carrier in an attempt to help return it to its former glory.
In a February letter published in BusinessDay, Barnes said he had tabled a proposal with the government in September 2021 which would see him lead a consortium to purchase at least 60%, but no more than 75%, of the Post Office.
“The purchase price will be the net asset value of the post office, less the present value of the forecast losses, as determined by the auditor-general,” he said.
“The consortium, over and above the purchase consideration, will inject a further capital sum into the post office, equal to the determined present value of agreed future losses to be funded, in the form of low-yielding (CPI, say) redeemable, convertible debentures, which will either be repaid or converted into further equity in the post office, coincident with the planned listing and further permanent capital raising in the post office, in three years’ time.”
Other parts of the proposed deal would see 10% of the total issued shares in the post office allocated directly to employees, with Barnes himself reappointed as chief executive for a period of three years to help oversee the transition.
Read: Updated grants system planned for South Africa
Artmotion S.Africa
