The South African Post Office has confirmed that it is in the process of closing about 130 of its offices across the country mainly due to financial challenges.
It has told Parliament that delays to complete the process have been caused by the current contracts it has entered into with various landlords.
Chief Executive Officer Nomkhitha Mona says the majority of the earmarked offices have already been vacated.
“Now we are left with 80, those are the ones that we are still looking into closing. I think what is important to note is that sometimes we do have to respect the current contracts that we have with the landlords because if we just step out of it immediately we then prone to penalties. So we are doing that in a staggered form so the number is 80 to go and the target was 130 so we have to close some of those,” says Mona.
The Department of Communications and Digital Technologies says it will soon establish a team of experts to help in the turnaround strategy of the cash-strapped Post Office and also address other ongoing concerns about its business operations.
The department has told Parliament that before it can approach the National Treasury for funding, it needs to get a comprehensive report so it can fully understand the issues.
Growing concern on governance challenges facing the Post Office
The Post Office has recorded financial losses of R1.7-billion and its current liabilities exceed assets by R1.49 billion. This is according to the Auditor-General’s report for the 2019/20 financial year.
“The work that is going to be done is not something new on the part of the department. We have previously assisted other entities, for example, if members would recall there was a financial year where SABC was in a similar position where the department then intervened by appointing a team of experts who then assisted in terms of coming up with a turnaround plan,” says Reneilwe Langa, Senior Official.
In April, Auditor-General Tsakani Maluleke found that the Post Office is commercially insolvent.
SA Post Office heads to court to stop courier companies from delivering 1kg and fewer packages: