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The SA Post Office (Sapo) goes before the parliamentary portfolio committee on communications on Tuesday, hoping to table the organisation’s turnaround plan, which has been under development since last year.
Sapo was put under administration in November after a protracted four-month illegal strike that brought the organisation and its services to a standstill.
Government appointed an administrator, Simo Lushaba, to stabilise the organisation. Sorting out labour relations was his first urgent task.
Lushaba and Sapo have taken a hard line with employees who were involved in the illegal strike. Six employees who took part in the strike were convicted of contempt of court for failing to abide by an interdict prohibiting strike activity.
The employees were sentenced to imprisonment of 12 months each or a fine of R6 000. They were also dismissed after an internal disciplinary inquiry.
The tally does not stop there: 100 employees at Cape Mail have been charged internally and are undergoing disciplinary procedures, 12 employees were also arrested for taking part in the strike, and eight employees in Bloemfontein were suspended and charged with assault and intimidation.
Cameron Mackenzie, a DA member of Parliament’s communication portfolio committee, said Sapo had to be hard on employees who engaged in illegal strikes.
“What is clear is that Sapo and Lushaba cannot afford to tolerate any illegal strike action. Sapo is on its knees and unreasonable demands for pay increases that are three times the inflation rate from one of the three Sapo unions is both irresponsible and a threat to the continued sustainability of the business,” said Mackenzie.
Once cash-strapped Sapo gets it staff working again, perhaps it can get back to business and make an effort to grow revenue.
“A government guarantee had been issued for R1 6 billion in addition to overdraft funding,” said Mackenzie.
“Sapo has a very strong balance sheet in terms of assets, so it is not insolvent. What it does have is a severe cash flow problem,” he said.
The cash flow problem is largely as a result of declining mail volumes and the effects of lost revenue during the strike.
“This remains their biggest challenge – and is the reason for the uncertainty among staff over salary payments, payments for premises rentals, payments to suppliers, etc. It appears as if they are managing a very fine balancing act in terms of cash flow and have been able to meet their commitments – but all on a ‘just-in-time’ basis,” said Mackenzie.
Signs of this have begun to show over the past month, starting with the suspension of Sapo’s account by SAA in April due to nonpayment, which meant that parcels being sent overseas were not delivered.
Acting Sapo CEO Mlu Mathonsi said SAA suspended the account without even phoning the chief financial officer, the administrator or himself.
“The delayed payment of the SAA account is linked to disagreements that the parties had relating to certain invoices dating back to November 2014,” said Mathonsi.
The bill has since been settled.
News24 reported last week that Sapo went to the North Gauteng High Court to ask for its bank accounts to be released – the accounts have been attached. This is part of a legal battle to pay cellphone service provider Nasasa Cellular R50 million as part of a debt settlement. The case was dismissed and the sheriff of the court will now determine – using money in Sapo’s bank accounts and any properties that can be attached – how the R50 million will be recovered.
But government is firmly behind the Post Office and, in an interview with City Press in March, Hlengiwe Mkhize, the deputy minister of postal services and telecommunications, said the viability of the Post Office was “not negotiable” – particularly Sapo’s banking subsidiary Postbank, which is meant to use the 1 500 post office footprint that extends into rural areas across South Africa to provide access to banking facilities and solutions.
According to Sapo’s annual report for the period ending March 31 2014, Postbank deposits increased by 5% from almost R4.5 billion in 2013 to R4.7 billion in 2014; and the number of customers increased to 7.5 million from 7.2 million in 2012.
Mkhize said Sapo needed up-skilling and it had to catch up with the times so it could provide a better service.
“And maybe one day we can trust the Post Office for our salaries,” she said.
But before the Post Office can begin to be serious about its turnaround, it needs to sort out its leadership and governance challenges.
Currently, it has no board and its CEO, Chris Hlekane, has been on suspension since October last year pending an investigation into allegations of mismanagement of funds.
Mkhize said that the suitability of board members was still being evaluated and that this was being finalised.
Mackenzie said the business model of the Post Office needed to be reviewed, but that this is not the end for the organisation.
“Post offices exist and thrive in other countries, and they can do so here. But I suspect that there will have to be some very painful changes and tough decisions taken before that can become a new reality.”
