SAPO: Seek out private investors; non-negotiable NO to bailout

Issued by Dianne Kohler Barnard MP – DA Shadow Minister of Communications
02 Sep 2022 in News

Please find attached a soundbite by Dianne Kohler Barnard MP.

It has been revealed that the South African Post Office (SAPO), which is technically bankrupt, owes the Medipos medical aid scheme R700 million for workers’ contributions.

Claims are that in the next 30 days, the medical aid will be discontinued – leaving 12 000 members and their families, some 22 000 people, without health cover.

The DA was shocked at the revelation that despite the contributions being deducted from each member’s salary, no payments have allegedly been made to the medical aid since 2020.

In a report presented to the Communications Portfolio Committee, laid out the details of the 20/21 Post Office annual results. It outlined the performance – or lack thereof – of the South African Post Office, which can today best be described as another failed State Owned Enterprise.

The latest Post Office management team blamed most of the difficulties on the Covid-19 pandemic, leadership vacancies; and a litany of other issues.

The report mentioned that the SAPO’s cash flow position was dire, as creditors, medical aid contributions, pension fund contributions and SARS obligations remained unpaid and would continue not to be paid unless urgent financial assistance was provided.

This is however not something new, as the SAPO has for a long time been engaging in what can only be seen to be fraudulent activities. Just last year, SAPO was taken to court for overdue contributions in the amount of R600 Million. This figure has since risen drastically.

The government has only one option: it must seek out private investors. South African taxpayers are under unprecidented financial hardship, and no bailout must be continanced. This is, of course, the fallback position of the ANC Government, which bails out failing SOEs on a regular basis.

The new management at the SAPO talks a good talk, but the cold, hard reality is that this is just another bankrupt state-owned entity riding a 15-year losing streak into financial insolvency.

The writing is on the wall, with the SAPO’s net loss of R591 million for the second quarter of the 2021/22 financial year, and its Post Bank debt of some R2.2 billion.

The question begs, how long will the Covid-19 excuse be used to justify incompetency? Once again, there is a net loss projected of R1.85 billion, negative revenue growth, R440m of the capital investment budget is unspent, and nothing has been done to prevent fruitless and wasteful or irregular expenditure. There is, additionally, no evidence of any disciplinary steps against officials who incurred irregular expenditure or criminal charges being laid against those accused of theft and fraud.

The Post Office as it stands is a total waste of taxpayers’ money. Their performance is beyond dismal, to the extent that it is unsalvageable.

In spite of the ANC’s unhealthy and single-minded resistance to any privatization of state entities, it cannot continue to hold onto the Post Office for some inexplicable sentimental reason, if that indeed is the reason.

When the ANC has failed for 15 consecutive years to deliver sustainable and reliable postal services to the general public, it makes no sense for them to retain full ownership of the Post Office.

Besides returning the Post Office to its former proficiency, a partial sale would save millions of rands on bailouts.