Damning response delivered on post office

THE South African Post Office crisis is so severe that an increasing number of unpaid suppliers are withdrawing their services, paralysing operations.

Telecommunications and Postal Services Minister Siyabongwa Cwele revealed this in a written reply to Cope and DA members of Parliament.

“The situation at the South African Post Office has been severe in that service providers and suppliers have in some instances withheld services, which has had a detrimental impact on the operations of the organisation,” said Cwele.

He said that some suppliers had not been paid for “up to 10 months”. This was in contravention of the Public Finance Management Act, which had prescribed 30 days as the maximum period for such payment.

Evident

Cele also revealed that 39 invoices from private contractors were unpaid. Two of the invoices were for catering services, while 37 others were for travel and accommodation bookings.

In November last year, Cwele placed the South African Post Office under administration after it became evident that the entity was hamstrung by financial problems, worsened by mismanagement spanning more than five years. In September last year, The Mercury reported that the organisation had wasted R2.1 billion of taxpayers’ money in irregular expenditure in the previous financial year.

An independent draft report by the auditing firms Deloitte & Touche and Nkonki revealed mismanagement, incompetence and chaotic internal control systems.

More than six months after being placed under administration, the situation remains bleak. There was also no evidence of a turnaround strategy.

Yesterday, Cwele acknowledged the situation. “The expected economic impact likewise should be drastic in that service providers are adversely affected by non-payment and their capacity to stay in business is compromised.”

Last month, South African Airways suspended its contract to carry post, citing unpaid bills.

“We have run out of options but to suspend the SA Post Office’s account,” said SAA spokesman Tlali Tlali.

Said Cwele yesterday: “The South African Post Office has entered into payment plans with its service providers and suppliers to ensure payments are made within the available resources. The government has permitted the South African Post Office to approach banks to raise operational financing.”