'Saving SA Post Office' — government doesn't expect business rescue plan to go beyond 18 months

Communication and digital technologies minister Mondli Gungubele says the restructured South African Post Office (Sapo) will be lean, agile and cost-effective.

He told journalists on Thursday he wasn't expecting the execution of the business rescue plan (BRP) to take more than 18 months. 

“The convention that rescue plans take between 12 and 18 months. We expect this one not to go beyond that. I suspect there is a possibility it might be less than that.”

The BRP was adopted by more than the required 75% of creditors in December last year with the agreement that 6,000 workers will be retrenched.

Gungubele said the aim is to save the entity and ensure business continuity and he has engaged cabinet to find an optimal approach.

“It is important to note Sapo remains fully operational and committed to delivering essential services.

“Despite the challenges, the public can still expect to receive their letters, courier packages, renew vehicle licences, withdraw social grants and receive chronic medication through Sapo.”

He didn't have the exact number of job cuts as the business rescue practitioners (BRPs) were better placed to address that.

“In [the] plan adopted in December there was an indicative number but there is a negotiation with the workers where we have been encouraging that everything should be done, if possible, to reduce that number,” he said.   

As announced by the minister of finance in the 2023 budget speech, Sapo has been allocated R2.4bn to assist in bringing stability.

“Saving Sapo and turning it around into an effective, innovative and financially viable entity remains the priority. The BRPs engage labour representatives to ensure a seamless process on all labour-related issues.”

Gungubele said branch closures will be done in a manner that does not compromise the universal service obligations of Sapo and 653 branches will remain open by the end of the year.

During the previous interaction with the BRPs, it was stated the branches would have been more than 1,000 but in the last engagement the number was put at more than 600, without a specific number given.

“We will make sure they give us the exact number of branches which are going to be closed.

“We are dealing with the post office that has financial challenges, the interventions are to ensure it becomes viable,” he said. 

Deputy minister Philly Mapulane said the BRPs told them there was a need to reduce the branches so the network is in line with the financial viability they have projected. 

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