With the South African Post Office (Sapo) proposing major pay cuts, experts say the entity is on the brink of bankruptcy and “will eventually die”. In an effort to reduce staff costs, Sapo confirmed that it is considering a strategy to put the staff bill “unsustainable”, which is currently 68% of expenditure. Chief economist at Efficient Group Dawie Roodt said the entity was bankrupt, with too many people working and too many costs without delivering efficient services. Roodt said with deplorable leadership, everything collapsed. “It has been in the process of imploding for some time,” he said. Rod…
With the South African Post Office (Sapo) proposing major pay cuts, experts say the entity is on the brink of bankruptcy and “will eventually die”.
In an effort to reduce staff costs, Sapo confirmed that it is considering strategies to reduce the staff bill “unsustainable”, which is currently 68% of expenditure.
Chief economist at Efficient Group Dawie Roodt said the entity was bankrupt, with too many people working and too many costs without delivering efficient services.
Roodt said with deplorable leadership, everything collapsed.
“It has been in the process of imploding for some time,” he said.
Roodt said this reflected what also happened to other state-owned enterprises. The private sector had to take over many post office functions.
Eliminate payroll
SA Post Office is likely to cut 40% of staff salaries through a reduced working week program and, according to communications manager Johan Kruger, considerations also include the process of voluntary severance packages.
“These measures are aimed at reducing labor costs, while saving some jobs – effectively a job-sharing model; while at the same time delaying the process of forced retrenchments,” said Kruger.
Roodt said this will not be easy, as the union will not accept this.
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He said the situation was a real political dilemma. “If you want to keep it like this [Sapo], you have to save your business and accept that people may lose their jobs and these other political goals are not financially feasible. The deployment of cadres must stop.
“This [the business of a postal service] it should be done on a commercial basis, but the politicians will not take that step and the inevitable is a slow death like any other entity.
To save these ailing companies, the private sector must take over “and that’s the silver lining for SA”, Roodt said.
Relics of the State of Capture
Political analyst Ntsikelelo Breakfast says SA is still experiencing remnants of state capture as state entities like Sapo have been targeted.
“The past is still with us and we see how people used it to pursue personal accumulation to gain wealth,” he said.
Breakfast said it will take time to turn the tide in terms of making sure the problem is fixed and they are up and running.
“The South African Passenger Railway Agency (Prasa) is collapsing, Eskom is collapsing, the SABC also has financial problems, so this just shows corruption is not just a buzz word but embedded,” he said.
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As taxpayers’ money continues to dwindle, questions remain as to whether it is necessary to keep Sapo open.
Breakfast said the truth is that the ANC believes in state development.
He said that the party is looking at Asian tigers such as China, Japan, Taiwan, and countries with fast economic growth and using state organs to promote economic growth and development.
“The ANC believes that it cannot eliminate the state entity, but the problem is the institutionalization of corruption. And the people assigned to these institutions are not up to scratch,” he said.
“I am not against deployment but if something is to be deployed, it must be strategic. The ANC makes a mockery of the deployment of cadres, which has led us to where we are today. The national development plan talks about a developing country that can, but without a good bureaucracy, it will not go away,” he said. Breakfast.
A crumbling entity
Calling Sapo out as a “crumbling entity”, the Democratic Alliance’s shadow minister for communication, Dianne Kohler Barnard, said the reduction in work will only worsen the delivery of services in Sapo.
“The number of permanent staff has decreased from 15 826 to 14 460 and the level of employee satisfaction stands at a disappointing 42%,” she said.
“Sapo has become one of the biggest failed SOEs and taxpayers have now been spending money on this corrupt and incompetent SOE for almost 20 years,” Barnard said.
But Sapo Group CEO Nomkhita Mona said that any self-respecting strategic leader would know that “doing nothing and putting your head in the sand” is not a viable strategy and, also, sitting and waiting for the government to guarantee the entity is not a viable strategy either.
“For one, it’s spending public funds – which could be better spent in more important areas, but at the same time it’s generally throwing good money after bad,” he said.
“There is a definite case to be made for some government support for Sapo at this time (because of the social mandate that the SA Post Office has), as well as the fact that it has been ‘allowed’ [deteriorate] this far.”
“My goal is to repeat the values of the Post Office,” said Mona, “so that you can find the contemporary benefits that have been generated – only through a combination of deliberate and emergent strategies.”
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