Post Office misses deadline but backlog mountain lower

The SA Post Office (Sapo) remains snowed under by a backlog of mail accumulated in July’s strike, with 16-million items on the floor at depots around the country.

CEO Mark Barnes promised in August that he would clear the backlog by the end of September after a two-week strike in July led to a 38-million backlog of letters and parcels.

But that deadline has now been missed and the public remains frustrated, prompting a recent letter writer to Business Day to remark that to call it snail mail “would be an injustice to snails”.

Barnes said on Thursday that the backlog had been cut down to 16-million in major sorting centres.

“Should the rate of clearance continue, we expect all domestic mail items to be up to date by end of October at the mail sorting centres.”

For the past two years Sapo has been battling to keep basic equipment such as vehicles, forklifts, bags and pallets on the ground as creditors withdraw their services due to unpaid bills. These difficulties had made clearing the backlog from the strike more difficult.

“The Post Office had to revise its transport route to optimise and save costs, and this has resulted in some final delivery destinations being serviced only on alternate days.

“As a result, some of the items dispatched from major sorting centres may not be delivered as yet ... Sapo will endeavour to continuously keep our customers informed, through the media,” Sapo said on Thursday.

The Post Office also said it was taking steps to improve the processing of international items at the main post office centre at OR Tambo airport, which receives 250,000 new items a day. This includes sending mail to other depots and plans to extend working hours to 24 hours a day and seven days a week.

The state-owned company is hoping for good news from the medium-term budget policy statement later in October and has applied to the Treasury for a R2.7bn loan guarantee to pay outstanding creditors.

A recapitalisation of R3.7bn paid by the Treasury in October 2017 was also used to pay creditors and pay off debt.

As part of its turnaround plan, Barnes also hopes to persuade the government to reinstate an annual subsidy for Sapo as much of its business in terms of its mandate — the delivery of mail to far-flung areas — cannot be undertaken profitably.

The subsidy was withdrawn in 2011, because according to minister of postal services and telecommunications, Siyabonga Cwele, it had been incorrectly reflected in Sapo’s financial statements as a profit.

In its last set of annual financial statements tabled in parliament last week, the auditorgeneral expressed doubt about the company’s going-concern status — its ability to continue operating without requiring significant asset sales or a debt restructuring — saying it was unable to generate sufficient revenue to finance its costs.

The company reported a loss of R908m for the year to endMarch 2018, a marginal improvement on its loss of R987m the previous year.

Barnes’s plan for a turnaround includes diversifying the business of the Post Office by using its extensive infrastructure to provide other government services, such as the payment of social grants, and to provide low-cost banking to the poor.

It is set to fully take over the payment of more than 17-million social grants from October.