Finalisation of strategic partner for South African Post Office nears completion

The finalisation of a strategic private-sector partner for the South African Post Office is imminent, pending the court’s review of the Business Rescue Practitioners’ (BRPs) report and the completion of processes to appoint the entity’s board.

Minister for Communication, Digital Technologies and Innovation, Solly Mahlatsi, said at an economic cluster portfolio briefing in Parliament on Wednesday that the department was formalising all the bids for strategic partnership through an assessment process and was particularly keen on partners with e-commerce, digitalisation and warehousing capacity.

Mahlatsi said, “The BRP has indicated there have been unsolicited approaches from the market. What we wanted to do was call out so we can assess who has the capacity and appetite to partner with the Post Office from a digitalisation perspective, a warehousing perspective, and even in consideration of e-commerce partnerships.

"My belief is that if it is not signed, it is not sealed, so there have been discussions with several partners in the market, and because getting into a final agreement on a contract involves a lot of back and forth, those have not been finalised. But there are very credible partners in the market who have already, of their own accord, made approaches either to the department or to the BRPs,” Mahlatsi said.

He said the exiting BRPs had shared their affidavit to be filed with the court, which would make a determination on the exit.

“What we want to do as a department is prepare for the day the BRPs exits. We don’t want that day to arrive before we have finalised the appointment of the Post Office board. That is why, in the last two weeks, we have finalised the selection panel to kickstart the interviewing and shortlisting of the board applicants. I can’t give you the exact time when we will finish that, as there are several dependencies. When the selection panel is done, then it is a responsibility between the department and the Minister to look at the calibre of what is recommended, and if we are satisfied, we take it to the Cabinet Committee and then Cabinet,” Mahlatsi said.

He said as the business rescue process had not been finalised, even the government was constrained in the interventions it could make.

Mahlatsi said, “The reality is that any considerations about prolonging the sustainability of the Post Office mean that we have to look with an open mind at prospects of attracting sustainable private investment. It’s important that the post-BRP chapter lands into stable leadership. For that reason, we have initiated a process to appoint the PO board so there is a leadership structure and there is no disruption between the period the court grants the BRP their request and the time of finalisation of the board.

"It’s a long journey, a complicated process; it depends on external factors in terms of how quickly we finalise the board and the Cabinet compliance process that must be done. There is no way in which we can guarantee the future of the Post Office by thinking we can survive with sole dependency on government funding alone. The evolution in the sector and the burden on the fiscus require that we explore the channel of private-public partnerships in the market so they can help sustain the Post Office,” Mahlatsi said.

Mahlatsi said the immediate focus is on its survival and on safeguarding its operations so there is no wipeout of branches.

BUSINESS REPORT