The SA Post Office gave a frank account to Parliament's Portfolio Committee on Communications of its dire financial position on Wednesday evening. It suffered an operating loss of R3 billion in the 2020/21 financial year, after government initially budgeted for a loss of only R177 million. The Post Office expects another operating loss of almost R2.1 billion in the 2021/22 financial year.
According to the Post Office, 89% of mail now reach its intended destination. This is below its target of 92%, which is also the Independent Communications Authority of SA's required threshold of the Post Office, reports Netwerk24.
The Post Office wants to achieve 92% delivery in this financial year, and it wants to automate all of its mail centres by the end of the year. It also plans to implement security upgrades at 1 680 Post Office branches this year.
Treasury warned last year that the Post Office is in danger of collapsing and that the Department of Communications and Digital Technologies has not done enough to repurpose the institution.
Communications Minister Stella Ndabeni-Abrahams told Parliament recently that government had not given up on modernising the Post Office and improving its financial position, as they continued to try and get Postbank its banking licence as a consumer bank.
The Post Office also recently doubled down on its insistence that it is the only party that is allowed - under the Postal Services Act - to deliver parcels weighing 1kg and under in the country. It is taking legal action against PostNet and other courier companies to cement this right.
The Post Office has been in arrears with some of its landlords, and many of its branches remained closed until this week. Some branches still remained closed as negotiations with landlords continue.
On Wednesday, a Post Office delegation told the committee that, in the 2020/21 financial year, it was forecast to register revenue of R3.3 billion along with expenses of R6.4 billion, with the largest expense being staff related costs at R3.8 billion.
This year, it is budgeting for R6.9 billion in expenses and is projected to make R4.8 billion in the 2021/22 financial year, leaving a R2.1 billion operating loss.
The Post Office anticipates that it will keep staff expenses at R4.1 billion from the 2021/22 financial year to the 2023/24 financial year. By 2023/24, the Post Office expects that its operating losses will narrow to R741 million.