Cape Town - Is the South African Post Office worth rescuing, considering its dismal financial state of affairs?
This is one of the questions deputy president Cyril Ramaphosa had to field in parliament on Wednesday when IFP MP Liezl van der Merwe enquired if the Post Office has a right to exist as a public company.
Ramaphosa listed a number of positive attributes that would put the loss-making entity on the right path, among which a new board and CEO Mark Barnes, as well as a clear vision and a new strategic plan.
“Let’s give the Post Office the opportunity to implement their new strategic plan. In addition, they’ve received a R650m injection and they’re talking to a number of financial institutions to raise more capital.”
Ramaphosa cited Japan as an example where that country has recently made their postal services a public company. “It could be where we want to go.”
In a follow-up question Ramaphosa was asked to assure South Africans that the latest Post Office bailout would be the last. (The entity requested a R2.3bn bailout from government in November last year.)
“The board of the Post Office are looking forward to a future where they’ll no longer ask the fiscus for money,” Ramaphosa responded. “Yes, they are loss-making (it reported a loss of R1.5bn in the 2015 financial year, and a provisional loss of R1bn in 2016), but they’re realigning and they’re relooking at their property portfolio for example. They have good solutions.”
Ramaphosa appealed to MPs to not “rubbish” the Post Office, but rather give them a new chance and wish them well.
“We said the same last year with Eskom – that they’re repositioning themselves and everybody was jeering on the other side,” he said in reference to the DA.
“Today Eskom has been repositioned. It’s no joy that state-owned enterprises continue coming to the fiscus. But we must support them so that they can regain the stature of the past where they paid dividends.”
Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.
24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.