Johnathan Paoli
THE EFF have condemned the recent approval of the South African Post Office (SAPO) business rescue plan to retrench 6 000 workers and close 420 branches nationwide.
SAPO unveiled its rescue plan on Thursday in what it claims is an attempt to combat the myriad of challenges the postal service has been facing, from declining mail volumes to escalating competition from digital platforms and financial mismanagement.
EFF Spokesperson Sinawo Thambo said the devastating decision that can only be described as a jobs bloodbath, was borne from years of ANC mismanagement and neglect, will only serve to deepen the unemployment crisis and further marginalise vulnerable communities who rely on essential postal services.
The business rescue plan got an overwhelming endorsement by creditors, after presentations from the business rescue practitioners (BRPs) in a meeting on Thursday.
The joint BRPs Anoosh Rooplal and Juanito Damons confirmed the development, noting that the two-phased restructuring of the business will enable it to fulfill its social mandate.
“We believe that with our continued involvement, hard work and detailed strategy, we can restructure the Post Office into a future-proofed business that can provide ‘communications inclusion’ for all South Africans,” Rooplal said.
The first part of the plan is expected to concern stabilising the Post Office, which will include reducing the entity’s branch footprint to 600 and retrenching 6 000 employees.
According to the rescue plan published by SAPO last month, the entity had over 11 000 staff members on its books by September this year.
In the plan, employee costs were highlighted as a major operational costs, and to bring this down to a preferred level, SAPO would need to reduce annual employee costs by R1.2 billion, with an expected cost of R600 million in retrenchment packages.
National Treasury announced an allocation of R2.4 billion for SAPO in the February budget, which according to the BRPs, had already been used to address the entity’s immediate operational expenditure items; and for an effective turnaround an additional R3.4 billion would be required, a sum which they anticipate to be released next year..
At least R1.5 billion of that is expected to be allocated to creditors, R2.75 billion invested in capital equipment, R600 million to retrenchment packages, and a further R1.2 billion to exist as a buffer for operating cash flow shortfalls over the next three years.
The EFF said that one of the most aggravating consequences of reducing the number of Post Offices would be that SASSA beneficiaries, particularly those in rural areas, would be forced to travel even longer distances to collect their social grants, incurring additional financial burdens and hardship.
“We are witnessing the potential dismantling of a vital public service, leaving millions of South Africans without access to essential services and jeopardizing the livelihoods of thousands of workers as the country faces a cost of living crisis,” Thambo said.
Thambo said that the party has long recognised the critical role of well-functioning SOEs in building a robust and inclusive economy and that the ANC’s reckless push towards privatisation, under the direction of Minister of Public Enterprises Pravin Gordhan, through deliberate neglect of SAPO is deeply concerning.
“The EFF would remain committed to fighting for a South Africa where SOEs are managed effectively and contribute to a just and equitable economy and instances such as this confirm the urgent need to remove the ANC government in 2024, as they have no verifiable plan to create jobs, but are determined to create unemployment”.
In addition, earlier this year Communication Workers’ Union GS Aubrey Tshabalala, expressed his shock and outrage at the lack of communication with the labour force regarding the planned retrenchment and said that it was a lack of support from government that has led the entity to where it is today.
DA Shadow Minister of Communications and Digital Technologies Natasha Mazzone criticised the restructuring of Sapo and said that these interventions would worsen the unemployment crisis as well as worsen circumstances for the vulnerable that rely on the Post Office.
“This is nothing short of devastating; but has been long in the making, due to ANC maladministration,” Mazzone said.
The party called on Minister of Communications and Digital Technologies Mondli Gungubele, to address the public on his plans to address Sapo branch closures for customers and whether retrenched Sapo workers will receive retrenchment packages and other support.
Mazzone questioned the effect this might have over the SAPO Amendment Bill, what this meant for the SA Postbank, which is currently owed R3.2 billion, and whether the entity’s executive members will also face pay cuts considering the CEO is currently early R4 million.
The practitioners have said that they expect the plan, upon implementation, to achieve a better return for creditors and an improved outcome for all other affected persons, against the result from an immediate liquidation of the company.
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