SA postal service fails the public

State-owned enterprises play a significant role in the South African economy, but sadly many of them are failing entities –  a glaring example of which is the South African post office (SAPO). The SOE is technically bankrupt due to debts in the billions and an ageing and inefficient infrastructure. It seems as though it is on the brink of collapse. The Daily Friend reports that the Post Office owes the Medipos medical aid scheme R700 million for employees’ contributions and says in the next 30 days, Medipos will be discontinued, leaving 12, 000 members and their families, some 22, 000 people, without health cover. SAPO said last year that decreasing revenue and the effects of the Covid-19 pandemic were the main reasons for its financial woes; but others may ascribe the ANC’s failure for years to support sustainable and reliable postal services to the general public as the main cause. – Asime Nyide

Post Office bankrupt

Staff Writer

The South African Post Office (SAPO), which is technically bankrupt, owes the Medipos medical aid scheme R700 million for employees’ contributions.

It is alleged that in the next 30 days, Medipos will be discontinued, leaving 12 000 members and their families, some 22 000 people, without health cover.

Despite employees’ contributions being deducted from each member’s salary, allegedly no payments have been made to the medical aid since 2020.

A report presented to the Communications Portfolio Committee, which laid out the 2020/21 Post Office annual results, outlined the lack of performance of SAPO, another failed State-owned Enterprise (SoE).

The current SAPO management team blamed most of the difficulties on the Covid-19 pandemic and leadership vacancies.

Creditors, medical aid contributions, pension fund contributions and SARS obligations remain unpaid and will continue to be unpaid unless urgent financial assistance is provided.

In 2021 SAPO was taken to court for overdue medical contributions of R600 million. According to the Democratic Alliance, the government must seek out private investors.

SAPO is riding a 15-year losing streak into financial insolvency. The Post Office suffered a net loss of R591 million for the second quarter of the 2021/22 financial year, and its Postbank debt is about R2.2 billion.

There is a net loss projected of R1.85 billion, and 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 DA says that the government cannot continue to hold on to SAPO.

The ANC has failed for 15 consecutive years to deliver sustainable and reliable postal services to the general public.

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