DCDT details plan to save ailing Post Office

  • The Department of Communications and Digital Technologies (DCDT) is preparing to deliver its strategy to fix the South African Post Office.
  • The utility has an estimated debt of R5.4 billion, with branches closing every month due to non-payment of rent.
  • Ecommerce is said to be a big part of how government plans to re-focus the Post Office moving forward.

Next week the Department of Communications and Digital Technologies (DCDT) plans to present its plan to Cabinet to make the South African Post Office viable again. The ailing utility has struggled in the wake of the pandemic, with numerous branches shuttering doors as a result of not paying landlords, and its debt now estimated to be around R5.4 billion.

The utility has received a sizeable amount of money allocated via the latest annual budget, but it is still not enough to address the mounting debt. Added to this is a continued inability as regards basic service delivery, including issues when it comes to handling SASSA payments.

Either way, some drastic changes are needed before the Post Office shuts down for good.

“We will in the next coming week table an approach to Cabinet for approval to ensure business continuity. We want to reiterate that government’s main objective is to ensure that this entity is repositioned, modernised, and continues to serve the millions of South Africans it has been serving over the past 200 years,” DCDT Minister Mondli Gungubele told members of Parliament in Cape Town this week.

After outlining several of the hurdles that have hampered the Post Office in recent years, including ongoing legal disputes, a significant loss in revenue, and crippling worker strikes, the minister detailed a few elements of the new strategy for the utility.

“For now, it is vital to assure the public that we are working tirelessly to ensure that the optimal option to mitigate the liquidation is put in place, with the objective being to save the entity. This will ensure that the impact of the liquidation on ordinary South Africans making use of SAPO services is mitigated,” he said.

“It is for this reason that Cabinet has already approved the ‘Post Office of Tomorrow’ strategy, which reviews SAPO’s operating model to restructure it in such a way that it can operate as a sustainable, productive and efficient entity,” he added.

Further unpacking the strategy, the minister outlined some of the key areas his department will be focusing:

  • “A leading logistics service provider for South Africa and the region;
  • A logistics service partner to other e-commerce and logistics players, including SMMEs and informal traders nationally and internationally, based on its expansive postal network;
  • An e-commerce hub for South Africa and the region;
  • Business digital hubs that also serve as digital hubs for communities; and
  • Designated authentication authority that also fulfils its role as a national trust centre in the age of digital identity and services.”

While it is promising to hear that there are specific points that will be addressed, the mention of ecommerce does concern us. This especially as the Post Office recently tried to throw its weight around and make the couriering of certain packages in SA its purview.

Either way, the coming months and years will prove critical, otherwise it will become another failed government utility.

[Source – SA News]
[Image – Photo by Mikaela Wiedenhoff on Unsplash]


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