Government needs to use the Post Office, a new draft law says

Business Insider SA

  • The government should use the Post Office so that the government doesn't have to bail out the Post Office, the government says in a new draft law.
  • The South African Post Office SOC Ltd Amendment Bill calls on various levels of government to "set-aside certain services to be provided by the Post Office".
  • The draft law will also allow the Post Office to charge different fees in different areas, to make it more sustainable. 
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The government would like the government to use Post Office services, so that the government doesn't have to keep the Post Office afloat through bailouts, according to a draft Bill published for public comment on Wednesday.

The South African Post Office (SAPO) "should be seen as an extension arm of the government and as such should be considered the preferred supplier of certain services," argues an explanatory memorandum accompanying the South African Post Office SOC Ltd Amendment Bill.

In the draft law itself, that translates to national, provincial, and municipal-level government units being "encouraged" – but not forced – "to utilise services offerings by Post Office and its infrastructure in the delivery of their services and set-aside certain services to be provided by the Post Office to assist in eliminating over-reliance on government funding by the Post Office."

Last year the Post Office asked for a R1.8 billion bailout. To raise the equivalent revenue from government business would require government structures to post approximately 320 million envelopes or postcards – or more, if they use discounted bulk services.

See also | Sending parcels and mail through the SA Post Office is about to get more expensive

The draft amendment argues that the Post Office is at a disadvantage because of its mandate to provide a universal postal service, "even in areas that are not profitable and do not make business sense, whereas other operators cherry-pick affluent areas that they are guaranteed to make profit."

"Allowing for the utilisation of SAPO infrastructure to be utilised by governments departments at a fee will offset the losses that they are currently incurring to provided [stet] universal services obligation that they are required by law to provide, regardless. This will also ensure that SAPO does not rely on government bailout and subsidy as it is currently the case."

The proposed amendment also opens the door to the Post Office charging different prices for the same service in different areas.

"This is to ensure that the SAPO is able to recover costs of providing services and not operate at a loss," according to the explanation of the intent of the Bill. 

The draft is now open to public comment for the next 30 days.

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