Post Office failure could be ‘catastrophic’
The chair of Parliament’s Communications & Digital Technologies Portfolio Committee, Boyce Maneli, has urged government to allocate funds to the struggling SA Post Office, saying failure to do so could be ‘catastrophic’ to service delivery.
Maneli said in a letter to Parliament’s Finance Committee last week that the decision not to allocate funding to the Post Office in the medium-term budget policy statement tabled last month was ‘erroneous’.
A Business Day report says the technically insolvent SOE has been pushing for a R1.6bn bailout to stay afloat.
Its most recent annual report said it incurred losses of at least R2.2bn (down from about R3bn the previous year) and its liabilities exceeded total assets by more than R4bn.
The AG issued a disclaimer and raised doubt about its ability to stay afloat due to crippling losses.
In his letter, Maneli said a cash injection would help soften the blow the Post Office is likely to suffer due to separating it from Postbank.
The separation is necessary for Postbank to get a full banking licence, because the Post Office is not in a sound enough financial position to meet requirements for registration as a bank controlling company in terms of the Banks Act.
Maneli said the success of a turnaround strategy depends on a financial injection from the National Treasury.
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