
Post Office jobs deal now active
JOHANNESBURG - A deal between the South African Post Office and the Unemployment Insurance Fund has been announced formerly by the Minister of Employment and Labour.
It's aimed at saving nearly 6,000 jobs and revitalising one of the country's most critical state owned entities.
Through the Temporary Employer-Employee Relief Scheme the UIF will inject over R381 million into the post office over six months.
This will provide relief to workers while the Post Office attempts to turn around.
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The Citizen
18 hours ago
- The Citizen
Post Office rescue plan slammed for lack of transparency and strategic detail
The Post Office turnaround strategy is being criticised for raising more questions than providing answers. The Select Committee on Economic Development and Trade expresses concern about the work of business rescue practitioners on the South African Post Office's (Sapo) turnaround strategy. This follows the practitioners' plan presentation in parliament on Wednesday, which outlined the progress being made. According to the practitioners, their long-term vision is to transform the Post Office into an e-commerce hub and multipurpose service centre. Concerns about further job losses and transparency Committee chairperson Sonja Boshoff said troubling realities remain. The biggest being the retrenchments of more than 4 000 employees, with no confirmation that there will not be any further job losses. 'Service delivery at the Post Office has significantly deteriorated, and the entity continues to survive on state bailouts. Public confidence has been completely eroded, and the long-term sustainability of Sapo remains in serious jeopardy,' Boshoff said in a statement on Thursday. She also raised concerns about the practitioners' request to present substantial portions of the turnaround strategy in a closed session. 'Sapo is a state-owned enterprise funded by public money. The use of in-camera briefings must remain the exception, not the rule. 'Such briefings should only be permitted in instances of legitimate commercial sensitivity – not as a tool to shield institutional failures from public scrutiny and parliamentary oversight,' Boshoff said. ALSO READ: Post Office rescue plan is working, but more money is needed Timelines and funding clarity The prevention strategy has been criticised for offering limited details regarding innovation and measurable outcomes. The committee notes that while the plan references digitisation, a revised branch footprint, and hybrid financing models, these aspects remain vague, lacking implementation timelines and funding clarity. It is troubling that no investor has yet shown serious interest in supporting the turnaround of the national postal service, Boshoff said. Unanswered questions She said the following key questions remained unanswered: How many of the retrenched employees have actually received support through the Temporary Employer-Employee Relief Scheme (Ters) fund? What efforts have been made to engage the private sector in restoring core service functions? On what basis is Sapo still classified as a 'strategic national asset' while continuing to rely on repeated state bailouts? How will the proposed hybrid funding model work in practice, and who will ultimately bear the financial risk? 'It is imperative that public institutions – particularly those under business rescue and funded by taxpayers – operate with transparency, accountability, and defined performance indicators, the committee chairperson said. ALSO READ: More millions to save jobs at SA Post Office 'A turnaround plan cannot rely on slogans or structural tinkering. It must restore credibility, modernise operations and rebuild trust with the South African public who depend on these services.' Clarity, accountability and transparency Boshoff also emphasised that as the committee continues its oversight work, it will insist on greater clarity, stronger accountability and full transparency from all parties involved in the business rescue process. 'The relevance of the Post Office in the broader communications and logistics sector is fast diminishing. 'This can only be reversed through genuine diversification of its service offering and complete modernisation of its operations,' she said. Retrenchments and saved jobs A total of 4 875 employees were retrenched in 2024 after Post Office entered business rescue, with a R8.7 billion debt. In May, it was announced that Sapo and the Unemployment Insurance Fund (UIF) agreed on a deal to fund salaries of the remaining employees while the government works to restore the postal service's fortunes. The agreement saw the return of Ters, used during the 2020 global health pandemic. Ters will inject R381 million into the post office over six months to assist 5 956 employees. NOW READ: The plan to fix the SA Post Office

IOL News
2 days ago
- IOL News
Funding crisis looms for SA Post Office and Post Bank as rescue practitioners prepare to exit
The National Treasury firmly ruled itself out as an option to recapitalise SAPO. Image: Supplied Uncertainty surrounds the funding of about R7 billion needed to recapitalise both the South African Post Office (SAPO) and the Post Bank after National Treasury firmly ruled itself out as an option. This comes as the SAPO Business Rescue Practitioners prepare to exit the process, leaving the entity with a R1.7bn paper profit. During a briefing to Parliament's Portfolio Committee on Digital Technologies and Communications on Tuesday, SAPO's group acting CEO, Fathima Gany, expressed the urgency of the situation. Gany said SAPO required R3.8bn to efficiently run its extensive network of 657 branches while integrating necessary digitisation capabilities. "The magic number is R3.8bn. It could be anything else, unfortunately the fiscus doesn't have the ability to give us that and we have to appreciate that. How do we get SAPO fit for business to operate in this futuristic space that's digitalised?" Gany said. "We don't know what the funding model will be as we go out to the market. It has to be a hybrid because if it's not a hybrid and we turn only to the fiscus and the answer is no, then its a futile discussion on how to get SAPO ready for business." Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Gany said the Post Office had settled all historical and outstanding debt through the business rescue process in a compromise that saw 12 cents to the rand paid out to the creditors, with the remainder flushed into the profit and loss account. She said SAPO looked like it made profits but those were none cash profits, and they were on the back of expenses while there were some creditors in dispute and immaterial amount. Gany said SAPO was close to finalising a service-level agreement with the Post Bank in the services it delivers to it, and some of the commercial revenue streams envisaged from postal branches. Meanwhile, Post Bank acting CEO Nikki Mbengashe said it was unclear how the bank could structure the at least R3bn required for it to serve the identified niche. Mbengashe said one of the options was to obtain guarantees from the National Treasury to enable the bank to raise funding without necessarily diluting the shareholding. "How much funding do we need? A lot if we really want to build branches, if we want to build digital presence. We don't have ATMs, branches and the infrastructure we need to have to provide digital capabilities," Mbengashe said. "The minimum is R3bn. We have done that exercise, we are engaging with the board in our next meeting. We have no intention of privatising the Post Bank, but we do need funding therefore we need to find options. We have gone to the National Treasury three times and three times the National Treasury has said no." Cape Argus


The Citizen
3 days ago
- The Citizen
Increased risks of cyberattacks, limited skills among Sapo's challenges
The Sapo aims to move from a loss of R1.03 billion in 2025 to a net profit of R1.48 billion in 2029. The South African Post Office (Sapo) has a plan in place to turn its business around by 2029. However, several hurdles remain that it must overcome to reach its goals. In 2023, the state-owned enterprise entered business rescue with R8.7 billion in outstanding debt to creditors. It requested a R3 billion bailout at the end of 2024 to avoid liquidation, but National Treasury decided against the move. ALSO READ: Post Office rescue plan is working, but more money is needed For the financial year 2024-25, Business Rescue Practitioners (BRP) managed to pay creditors R1 billion. On Tuesday, Sapo presented its corporate plan to the Portfolio Committee on Communications and Digital Technologies, outlining its strategy for turning things around over the next five years. Sapo's corporate plan Acting CEO Fatima Gani stated that the entity is exploring the formation of partnerships with e-commerce platforms and small to medium-sized enterprises (SMEs) to unlock new revenue streams. Public-private partnerships would also help modernise Sapo infrastructure without requiring full privatisation, she said. The Sapo hopes to reach the R5 billion mark in revenue; however, this can only be achieved with the help of investments. ALSO READ: Union fights liquidation of Sapo while govt says it cannot bail it out 'If we had to achieve this revenue stream, there needs to be an investment, whether it's through a partnership, capital injection, equity injection, or raising funds on our own. We need those investments to make Sapo fit for business, to achieve a diversified revenue stream,' said Gani. 'We are forecasting to be breaking even around 2027–2028, which means working capital stress that we feel, and we keep on coming back to the government to say please help us fund this organisation, will fall away as we are on our investments from our diversified revenue stream.' Market threats Among other threats, Sapo will have to outplay increasing competition from more agile and technologically advanced private sector operators amid a decline in demand for traditional postal services. It will have to find growth amid weak economic conditions and increasing business costs, which will negatively impact Sapo's operational costs. There is also a threat of an increase in cyberattacks, which have recently targeted the public sector. Security costs are expected to increase by 6% per annum due to network expansion over the next five years. ALSO READ: Ramaphosa signs Post Office Bill into law 'This one keeps me awake at night, as it is relevant, and we have seen it happening in the public and private sectors. Unfortunately, if the very clever people put their minds into something positive, we would be ahead of this, but these very clever people join the dark side of the world,' said Gani. 'They are always a step ahead. How do you stay on top of cyberattacks? As a national asset, we hold critical information regarding citizens, including their personal information, residences, and addresses. This is something that keeps me awake at night.' Escalating operational costs, including employee wages, transport, and security services, exacerbate Sapo's financial distress. Employee salaries Last month, Sapo and the Unemployment Insurance Fund (UIF) reached an agreement to fund employee salaries for the last half of the year. The Ters scheme will inject R381 million to assist 5 956 employees. Gani lamented that the Sapo's slow pace to embrace digital transformation has limited its ability to compete effectively with the private sector. This is in addition to the limited skills to transform and modernise the entity 'We have multiple vacancies from a leadership perspective. We have limited skills internally.' The Sapo aims to move from a loss of R1.03 billion in 2025 to a net profit of R1.48 billion in 2029. READ NEXT: More millions to save jobs at SA Post Office