July 17, 12:42

Post Office plans to exit crisis, awaiting government funding and partnerships

Acting CEO Fathima Gany told TechCentral that Post Office is finally in a position to attract necessary partners for survival, provided the government provides the promised but unpaid 3.8 billion rand.

Legal and Financial Hurdles

Gany, who leads the senior team formed to bring Post Office out of business rescue, stated that the organization awaits a high court ruling on the business rescue practitioners' application for substantial realization. If successful, a new board of directors will take over management. Meanwhile, key tasks remain protecting assets and liquidity, finding partnerships, and launching the Aarto partnership.

However, the legal process faced an issue: the practitioners' application, which was supposed to receive a hearing date within six weeks, encountered opposition due to an unpaid payment of 18 cents rand owed to legitimate creditors. Gany noted that the goal is to settle this dispute through an out-of-court commercial agreement but warned that the contested application could drag on for up to six months, given that about a month has already been lost.

The Importance of Post Office in South Africa

When asked why Post Office is still needed in South Africa in 2026, despite consumers shifting to private courier services like Postnet and email, Gany explained that the answer differs outside of cities. She emphasized that from an urban perspective, the conclusion of unnecessary service is simple, but South Africa's population spread between city and rural areas places it among developing markets such as Nigeria, Egypt, Brazil, and India, where physical mail and point-of-sale transactions remain vital due to the lack of widespread connectivity.

The Company's Most Valuable Asset

In Gany's view, Post Office's most valuable asset is its reach. She stated that the organization possesses an intangible resource that other State-Owned Enterprises (SOEs) do not—a reach that allows it to reach ninety-eight percent of the population.

Regarding privatization, Gany believes it is not an 'either/or' choice but rather a hybrid model. She clarified that certain social obligations, such as universal service, international mail, and delivery regardless of profitability, are constitutional and 'will never disappear.' Many view the unprofitable business, forgetting that part of the business was not originally intended to be profitable.

Gany declined to discuss the government's decision to reject former CEO Mark Barnes, who offered 5.2 billion rand for the purchase of Post Office and recently claimed in an interview with Business Day columnist Peter Bruce that he had presented an offer involving China's Alibaba. This could have left the state with 40% and veto power over social obligations, but the deal was 'ignored,' according to Barnes. Gany replied that she did not know about this since it was before her time and believes that future deals can be structured differently.

She also argued that the business rescue process itself became an obstacle to concluding such a deal, as while the company is in rescue, there is a sense of distress that hinders attracting the best partners.

Revenue and Development Strategy

A potential buyer could be an e-commerce player interested in Post Office's 'last mile' reach. Gany noted that the Aarto contract, under which Post Office electronically and physically services traffic violation notifications, is a separate case, especially after the national launch of Aarto. She stressed that Aarto is not a partner but a government client.

Although Postbank was separated from Barnes' council, Post Office still receives about 67% of its revenue from traditional mail, which, in Gany's opinion, proves its relevance but also serves as a warning. She cautioned that this is not a business that can be considered stable for decades, as revenue will decline with modernization.

Diversification should be based on transforming into a multi-channel transaction platform for the state, including driver's license renewals and similar services at branches, as well as developing the 'first/last mile' courier business and a property portfolio she called a missed opportunity. Furthermore, Post Office is developing a commercialization strategy to monetize, sell, or repurpose property, pending the government granting exceptions to public finance management.

Sustainability Requirements

The rescue plan adopted by creditors in December 2023 was based on a government commitment of 6.2 billion rand, of which only 2.4 billion has actually been received. When asked about the possibility of sustainability without the remaining amount, Gany directly answered that this is a 'point of tension' because these funds must arrive.

She reported that Post Office applied to the national treasury for the next cycle of medium-term expenditure financing, which covers the 18 cents rand creditor payments, working capital—'you will not reach break-even for at least one or perhaps two years'—and investments to restore dilapidated branches and post offices. Gany rejects the term 'rescue,' calling it an 'investment in the organization.'

She rules out further cuts: as a result of the rescue, the number of branches was reduced to 657, and staff was halved to less than 6000 people. Gany stated that one cannot 'cut business before growth,' and no further reductions are planned because it is impossible to ensure '98% contact with the population' with less presence, although branches can be reimagined instead of being maintained as they were.

Restoring Trust and the Future

Given the history of mismanagement at Post Office, Gany stated that restoring trust is a formal area of work in itself. She shared her working philosophy: 'Financial difficulties are a symptom of management problems.' The senior team, assembled for the first time jointly with the communications and digital technology department, exists to prevent a management vacuum when the rescue practitioners and their hired legal, HR, and administrative managers leave on the day the court order is received. This team is intentionally temporary. Gany emphasized that the 'senior team is not meant to stay here forever.'

The success in two years implies having a mature board of directors and a permanent executive committee without the senior team, repaying debts through normal business operations, resolving solvency and liquidity issues, limiting government funding to the social mandate, and changing the revenue structure so it no longer depends 67% on mail. According to her, if they focus on these areas, 'I think you will do very well.'

www.aajtak.inJuly 6, 12:23

Postman in Rachi found not to have distributed mail for a year, causing outrage

There was a time when postmen were visible on the streets in both villages and cities, and even now many important documents reach ordinary people through the post office. Although the role of postmen has changed in the modern era, letters have stopped arriving, but documents are still delivered from the post office directly to people's doors.

Situation in Rachi

Imagine what would happen if a postman failed to distribute mail for an entire year. This is exactly the kind of incident discovered in the Kanke area of Rachi. For a year, the postman did not deliver correspondence, instead collecting all the mail into bags and storing them like trash. Everyone who learned about it was astonished: why didn't the postman deliver mail for a whole year, and why did no one file a complaint?

Reaction and Investigation

After this incident became known, the Postal Department suspended the postman from work. The case is related to the Pitoria post office in Rachi. The postman's actions undermined public trust in the post office, which is traditionally considered a symbol of reliability in the country.

Local residents are extremely outraged by the blatant negligence shown at the Pitoria post office in Kanke. The postman working at this office had not been delivering mail for the past year, instead hiding important documents in bags at home. Following constant complaints and public protest from local residents, the department began an investigation.

Documents Found

According to Inspector Dipak Kumar, the truth emerged after searching the postman's bag and the trash near the office. Numerous documents were found packed in bags. Among these documents were important citizen identification documents such as Aadhaar Card, PAN Card, ATM Card, bank passbooks, as well as crucial notices from the People's Court and the Tax Department.

This negligence not only created problems for ordinary people but also led to financial and legal losses for many due to the untimely receipt of notifications. Inspector Dipak Kumar emphasized that following such a serious violation, he initiated further investigation and strict measures. He clearly stated that the concerned postman has been immediately suspended from work, and action will be taken against anyone who committed such errors.

Further Actions and Questions

Furthermore, a special campaign has been promised, under which all detained letters and documents will be identified and delivered to the rightful recipients on a priority basis. This case is extremely serious because such negligence in a government system can have severe consequences for a person's life. It remains an open question why the postman acted this way: was it a problem with his mental state or was he acting under someone's instruction? It also remains unresolved who will compensate the damage caused to people due to the post office's carelessness.