South African Post Office CE Chris Hlekane.
South African Post Office CE Chris Hlekane.

THE South African Post Office (Sapo) has exceeded its budget for staff expenses by R16m as a result of additional costs incurred during the recent strike action and the conversion of casual staff.

Post Office chief financial officer Khumo Mzozoyana also told Parliament’s communication portfolio committee on Tuesday that revenue for the third quarter of 2011-12 was below budget by R196m.

The Post Office has been saddled by strike action in recent months, which led to nearly 600 workers being dismissed following an illegal strike caused by a fake court document that stated workers were owed significant amounts of money by the Post Office. MPs heard that the continuing strike has cost the state-owned enterprise a staggering R137m in revenue to date.

During the briefing on the Post Office’s third-quarter performance and strategic plan for the next three years, CE Chris Hlekane also told MPs that about 200 casual workers at the Post Offices Witspos branch in Johannesburg went on strike on Tuesday, demanding permanent employment by the company.

It is feared that the strike could spread to other regions.

MPs said that "the picture" at the Post Office was "depressing" and this could be worsened by Post Bank "going it alone".

"If the Post Bank — the cash cow of the Post Office — is eventually removed, we will really see Sapo going into a nonsustainable phase," said Democratic Alliance (DA) MP Butch Steyn.

Post Bank is set to get its banking licence, which will allow it to operate as a retail bank. It would then be a separate branch of the Post Office.

Mr Hlekane told MPs that the difficulties faced by Post Office had been worsened by the recent strikes.

"In terms of meeting our challenges, the situation has been worsened by the strikes which contributed to the losses we made," Mr Hlekane said.

MPs also heard that the Post Office was not meeting most of its targets. For example, one of its annual targets was to improve financial performance by growing revenue by 5.6% on top of declared revenue for 2011-12.

However it achieved 1,6% revenue growth by the third quarter (December last year). Also, the mail delivery target was 95%, and 89% was achieved by the third quarter.

Mr Steyn said it appeared as though Communications Minister Dina Pule and the Post Office management had not been "pro-active" in attempts to address the problems faced by the Post Office, especially the strikes. He said the mail delivery figure of 89% provided by the Post Office, "had to be taken with a pinch of salt".

"There has been a huge backlog. How did they get to 89%? … now I am told the strikes are going to spread to Cape Town," Mr Steyn said.

In its strategic plan presented to MPs, the Post Office said that some of its strategic goals included maintaining good corporate governance, remaining customer-centric by providing quality service, and attaining financial sustainability while delivering on the government’s social mandate.

However, an official from the auditor-general’s office told MPs earlier that most of the predetermined objectives were not specific, not measurable, not well defined, not time bound and not verifiable.