As culled from SA Post Office (SAPO) 2016 Annual Report, SAPO has been losing over R120 million every month.
The latest report highlighted that SAPO losses reduced to R1.15 billion from a previous R1.5 billion in 2015.
For the third year in a row, SAPO has received warnings from the Auditor-General (AG) regarding its deleterious financial repute.
As expected, opposition party, DA reacted to the SAPO losses calling for the introduction of “public-private partnerships” for SAPO.
That would be crucial in making the entity profitable and ensuring continuity in essential services for the poor and those living in rural areas, says DA.
Wailing that the SAPO losses “represents another milestone on its road to ruin,” DA asserted thus:
“…The outdated postal business model continues to drain scarce resources. Unless urgent steps are taken to introduce profitable public-private partnerships that include the Postbank, the courier and parcels business, it won’t be too long before funds run out and the SAPO turns to government for more bailouts.”
The DA indicated that SAPO, in addition to a government bailout of R650 million, borrowed more to stay out of much trouble for this financial year.
“Yet the entity continues to lose on average more than R120 million a month. With current borrowings in excess of R3 billion, and in the face of declining revenues, the ability of the SAPO to repay these loans must be called into question.
“By the end of this year, around R1 billion of this borrowing will have been used to fund the monthly shortfall between income and expenditure. When adding the interest cost of borrowing, it is clear the SAPO is dangerously close to running out of other people’s money,” DA warned.
The DA added that it’s more alarming SAPO is depending on government for new business and hoping to regain the customers it lost following the 2014 strike action.
“If the SAPO wants government business, it will need to compete fairly and transparently in the open market, where it is outclassed by a nimble and highly competitive private sector. Any alternative to this is nothing less than a hidden subsidy of another inefficient state-owned enterprise.
“Pre-strike SAPO customers have also gone for good, using alternatives to the unreliable SAPO service. To bank on this for a return to profitability is naive and irresponsible,” DA stated.