Government has done little to help, says chief executive of failing Post Office

SA POST Office chief executive Mark Barnes launched a broadside at the government yesterday over its broken promises to support the parastatal after it posted a R1.1 billion loss in the 2015/16 financial year.

Barnes told members of Parliament’s telecommunications and postal services oversight committee the Post Office was likely to declare a similar loss in the coming year, largely thanks to a budgeted R600 million in government business that hadn’t materialised.

He admitted that its qualified audit and achievement of just 21 percent of targets was unacceptable and said there would be consequences for senior management, who now had the elimination of audit findings included in their performance contracts.

But DA MP Cameron MacKenzie said dealing with the Post Office was “a bit like kissing a frog”. Each year it came to present its annual report, showing similar results and MPs kissed it, yet it never turned into a prince.

Barnes responded that the Post Office hadn’t felt any love in a long time, and by this stage was in need of CPR.

But he was angered when chairman of the committee Mmamoloko Kubayi suggested he was being “absorbed” by the system instead of changing it, as he appeared to be explaining why things couldn’t be done, rather than getting rid of those who didn’t perform.

Barnes said when he started at the Post Office he was told there was a cabinet resolution that 30 percent of government business should be awarded to the parastatal, yet none of it had materialised.

“We’ve submitted letters on Sassa, on the government employee housing scheme, we’ve submitted letters to all of those ministers – we haven’t even got a reply,” Barnes said.

“If we are going to make a loss of R1.4bn next year, it’s going to be primarily explained by the following: R600m of government business, R300m of courier business and R200m not realised from properties.

“The social grant system alone would make the Post Office profitable, yet it had been awarded to a foreign company. We were entitled by law to have that and they took it away,” Barnes said.

He had gone to the office of Chief Procurement Officer Kenneth Brown and offered to deliver his garbage or a bakkie load of empty envelopes to Cape Town to prove it could be done on time.

“If we deliver your garbage and then we deliver your empty envelopes, will you give us some real work, I asked him. Nothing’s happened as a consequence of that, except they turned down one of the tenders we went for.”

He was “ready to fight” for government business.

“I thought the cabinet was in control of the country and the cabinet said we’re going to get 30 percent of the business, we got nothing,” Barnes said.

He accused the Treasury of being the second big problem facing the Post Office as it refused to take its business plans seriously.

“That’s Treasury’s view of us – keep the Post Office going, Mark, for goodness sake, it’s a necessary service, but don’t come tell me you need R1bn to transform it into a leading commercial organisation like it is in India and Russia and Turkey and all of the European countries and England and America.”

He said all the successful post offices were leading technology companies with full support of government, that had listed on the stock market and raised capital.

“The Post Office is no longer irrelevant, physical delivery into infrastructure is no longer irrelevant – ask Amazon, ask Alibaba about physical delivery and infrastructure and they will tell you it is one of their most crucial delivery chain assets,” Barnes said.

Fixing the Post Office and expanding into e- commerce would add 2 percent to the country’s GDP, while the private sector was itching for the Post Office to fail so it could “pick up the scraps”.

craig.dodds@inl.co.za