A face lift for our imploding Post Office

William Saunderson-Meyer writes on the latest ANC govt efforts to rescue the SAPO


The wolves are hungry. Soon blood sacrifices will have to be made. 

We’re close to the end of the road. State-owned enterprises (SOEs) that have been leeching off the fiscus for 30 years will have to privatise or close. Real privatisations, too. Not the fake public-private partnerships that the government has tried to pull with the ports and railways, which are under such onerous terms that they’ll never work.

State finances are low and declining rapidly. Yet every day new excesses are being promised to the gullible masses. National Health Insurance! More and bigger grants! A bigger and better-paid public sector! ___STEADY_PAYWALL___

This disjunction between reality and the imaginary world inhabited by our rulers is one of the most confounding aspects of the African National Congress government. They live in a pre-Utopian waiting room that opens to a cornucopia of socialist delights, if only they could find on the digital lock a keyhole into which they could fit that cast-iron Marxist key that they’ve been schlepping for so long. 

But nothing dents their spirits, their inexhaustible optimism that something will eventually turn up. Our constitutionally secular government possesses more old-fashioned faith than the Vatican. Rather than face reality, the can is endlessly kicked down the road.

This week, with characteristic lack of urgency, it gazetted an inquiry by ICASA, the Independent Communications Authority, into the “regulations on the conveyance of mail”, in other words, the rules governing the operations of the Post Office (SAPO). 

The inquiry is scheduled to last for two years. Two years! 

Two years to unravel the problems and craft solutions for an entity that last year went into business rescue with accumulated losses of R19 billion, R12 billion in liabilities, and is currently losing more than R2 billion a year. It’s insanity, akin to embarking on cosmetic surgery — a tummy tuck here, a boobs’ lift there — on a corpse. 

On the other hand, it’s not only the government that has bizarre intentions towards SAPO. The business rescue squad has ambitions beyond a mere nose job on SAPO’s mouldering remains. They claim that they can resuscitate the cadaver and set it to work again.

SAPO’s rescue plans unfortunately have drawn nothing like the scrutiny and scepticism that met Public Enterprises Minister Pravin Gordhan’s ill-fated efforts to get the national carrier SAA back into the air. Those mostly consisted of the Treasury showering the airline with billions while Gordhan ran up and down the runway with his arms extended horizontally, puffing his cheeks, and making encouraging VROOM noises.

Admittedly, the scale of the two disasters is not the same, with SAA’s thirst for cash dwarfing SAPO’s. In its attempts to rescue the airline, the government pumped in more than R50 billion between 2004 and 2020. SAA’s business rescue plan cost at least another R10 billion — SAA’s true cost to the taxpayer has long been rather murky, with a lot of financial legerdemain at play — and all to come to nought when Gordhan’s secretive partnership deal with the Takatso consortium collapsed earlier this month.

However, SAA is innately more of a going concern than SAPO. Everywhere in the world, except for South Africa, the airline business is booming. The same cannot be said for post offices, with the public good of regular, reliable, and affordable mail delivery by the state in universal disarray. 

This has not discouraged the SAPO body snatchers, umm, rescue practitioners. They assured Communication and Digital Technology Minister Mondli Gungubele that at an initial cost of only R3.8 billion, they would breathe new life into SAPO. 

The slogan is The Post Office of Tomorrow and this will involve “new digital products”, the details of which the minister won’t disclose because they’re “commercially sensitive”. Each post office will be a “digital hub” and there is the unexplained promise of “hybrid mail extensions”.

Oh, and SAPO is now doing licence disc renewals. Since these can also be done at banks and supermarkets, as well as online, it’s not yet clear what SAPO’s competitive advantage is in this regard. 

The rescue squad reported that there were 894 “active” post office branches and 129 “non-active” ones — premises padlocked by landlords because SAPO failed to pay the rent — to give a total of 1,023. Their plan, announced in September last year, was to close 420 of them. Of SAPO’s 12,640 employees, 6,000 would be retrenched.

Already political pressure has changed these projections. Only 1,724 employees will be retrenched and last week Gungubele said that branch closures would be limited to 235. 

It is difficult to exaggerate the state of SAPO’s dysfunction. 

We all have our own horror stories. I, for example, have never received a parcel from Europe in under six months. One, from the Netherlands, took nine months, whereas Jan van Riebeek did that same route in 1652, under sail, in three and a half months. 

SAPO’s 2023 annual report, since when performance has deteriorated further, paints a dismal picture. There were 5,26 million undelivered items, up by two-thirds from 2022, but SAPO’s delivery fleet now has only 88 vehicles. International parcels dropped from 2.9 billion to 685 million. There were 4,186 “crime incidents” at post offices — my local post office at one stage was averaging more than one armed robbery a month.

In this, the same year that SAPO was provisionally liquidated and the Auditor-General issued a disclaimer on its financials, SAPO could find only two positive bits of news to highlight in its report. It proudly announced the continuation of its programme to deliver reading material to schools and kiddie reading clubs, as well as the minting of a Road to Democracy postage stamp.

There was a moment of hope for SAPO when its former CEO, Mark Barnes, made a buyout offer. This would very much have revolved around growing SAPO’s subsidiary, Postbank, into a fully-fledged financial institution. However, Barnes’ approach was scornfully dismissed out of hand and Postbank has since been hived off as a separate SOE, to eventually become the “state bank” that the ANC ideologues have been dreaming of for so long.

In the meanwhile, everyone is eating SAPO’s lunch. 

State grant recipients can now, more conveniently and safely, get their money directly into their bank accounts or collect it from terminals in major shopping and retail chains. SAPO’s erratic post box service, necessitated by the virtual disappearance of house deliveries, also has private sector alternatives.

Several companies provide reliable and competitively priced point-to-point deliveries. Postnet has 400 offices; Pargo has 4,000 collection points in supermarket chains and petrol stations, many of which operate 24/7. Africa’s biggest single brand retailer, PEP, offers a service between 2,800 PAXI points, transactions secured using cellphone identification, and operating seven days a week.

The one area where SAPO is fighting a desperate rearguard action is that of courier deliveries, where private companies have boomed. Four years ago, backed by ICASA, SAPO tried to close down its competitors by resorting to an old post office regulation, previously not enforced, that gives it the sole right to convey any item weighing less than a kilogram. 

The courier companies managed to stall the move in the courts and the government went off to lick its wounds. The government was scheduled to “make a determination” on the exclusivity issue — which incidentally also forbids private sector roadside deliveries and address boxes in retail outlets — at the end of this month. Instead of making that decision, the government has now appointed this two-year ICASA inquiry.

Such elaborate ANC machinations to avoid dealing with reality are doomed. The money to keep SAPO afloat is simply not there. Nor, for that matter, SAA, Transnet, Portnet and a host of other non-functioning SOEs. 

At the moment, however, the ANC doesn’t care. It’s working to a two-month horizon. It just wants to stall any further bad news and anger — keep the snapping wolves at bay — until after election day on May 29. 

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