South African Post Office shutdown warning

The Communications Workers Union (CWU) warned that the South African Post Office (Sapo) may cease functioning by the end of the month.

The CWU’s national bargaining coordinator, Nathan Bowers, said the shutdown could happen because the Post Office has not received the R3.8 billion bailout it was promised.

The SAPO previously said this bailout is necessary to complete its business rescue plan and create a sustainable organisation.

The Post Office was placed into business rescue in July 2023, and Anoosh Rooplal and Juanito Damons were appointed as business rescue practitioners.

Rooplal and Damons formulated a plan to revitalize the embattled Post Office, which was adopted in December 2023.

As part of being placed into business rescue, the SA Post Office received a R2.4 billion injection from the National Treasury.

This bailout was used to cover operations, settle debts, and pay salaries and severance packages.

In September 2024, the Post Office reported that 4,875 people had been retrenched out of the 11,083 total staff.

Only 113 of its 1,023 branches were profitable, so 366 were closed. This left 657 branches nationwide.

The plan also included another R3.8 billion bailout from the Treasury to pay statutory and payroll creditors. However, this bailout did not happen.

In November 2024, Finance Minister Enoch Godongwana said that the Post Office would not receive further government bailouts if it escaped business rescue.

Godongwana highlighted that the government’s medium-term strategy remains focused on fiscal sustainability and limiting financial support to state-owned enterprises.

Bowers said business rescue practitioners told them that the R3.8 billion is not forthcoming and that the operations and the workers’ salaries are in jeopardy.

“In the meantime, while there is dithering here and there, the Post Office workers and their families are in a state of panic.”

Bowers said the CWU called for a meeting with the government to explain why “it is undermining a court situation”.

He added that the Post Office would have been liquidated if the state had not planned on injecting the R3.8 billion.

Daily Investor’s sister publication, MyBroadband, contacted the BRPs and communications minister Solly Malatsi for comment. However, they did not provide comment by publication.