Post Office hanging on by a thread

The South African Post Office (Sapo) crisis is so severe that an increasing number of unpaid service providers and suppliers are withdrawing their services. This is leaving vital operations almost completely paralysed. Telecommunications and Postal Services Minister Siyabonga Cwele disclosed this state of affairs in a written reply to Cope and to DA MPs Deidre Carter and Tania Baker. The impact on operations is crippling the Post Office,” Cwele said, adding that some service providers and suppliers had not been paid for between nine and 10 months. This was in contravention of the Public Finance Management Act, which prescribes 30 days as the maximum period for the payment of service providers and suppliers. Cwele also revealed that 39 invoices from private contractors were currently unpaid. Two of the invoices are for catering services, while 37 are for travel and accommodation bookings.

In November last year, Cwele placed Sapo under administration after it became evident that the entity was experiencing deepening financial problems, exacerbated by mismanagement spanning over more than five years. In September last year, The Star reported that Sapo blew R2.1 billion of taxpayers’ money on irregular expenditure the previous financial year alone. An independent draft report by audit firms Deloitte & Touche and Nkonki showed that mismanagement, incompetence and weak and chaotic internal control systems were rife at Sapo. More than six months after Sapo was placed under administration, the situation remains bleak, with no signs of improvement. There was also no evidence of a turnaround strategy.

Yesterday, Cwele acknowledged the dire situation. “The expected economic impact likewise should be drastic in that service providers are adversely affected by the non-payment and their capacity to stay in business is seriously compromised,” he pointed out. Last month, South African Airways suspended its contract to carry mail to and from overseas postal services for Sapo, citing unpaid bills. “We sadly have reached a point where we have run out of options other than to suspend the SA Post Office’s account,” SAA spokesman Tlali Tlali said at the time. Opposition parties have repeatedly expressed concern at the crisis at Sapo, with Cope saying the entity was “bankrupt and dysfunctional”. Syntell and Siemens are reportedly among the companies to which Sapo owes millions of rand for their letter-sorting machines. Sapo has entered into payment plans with its service providers and suppliers to ensure some payments are made within available resources, with the government allowing it to approach banks to raise operational financing.