Is our failing Post Office really worth saving with a govt bailout?

The relevant parliamentary portfolio committee has raised concerns around the South African Post Office's presentation on the work of its two independent business rescue practitioners (BRPs).

While acknowledging the significant work done to date by the BRPs, says the Portfolio Committee on Comms & Digital Tech, it believes there is room for a 'more aggressive and innovative approach' to improving the fortunes of the ailing state entity.

The BRPs achievements so far have come at a great cost, the Committee said in a statement.

Even more alarming, it went on, was Sapo’s revelation of an imminent 'Day Zero' scenario. The Post Office has warned that it expects to exhaust all its cash reserves by October if it does not receive a R3.8 billion cash injection from the fiscus.

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Stephen Grootes interviews Anoosh Rooplal, one of two joint business rescue practitioners involved in the Post Office plan.

The 'Day Zero' scenario would place a legal obligation on them to place Sapo in liquidation, Rooplal confirms.

He explains that the business rescue plan was always dependent on two tranches of funding - the R2.4 billion already received, and the R3.8 billion they are still waiting for.

Approximately half of the R2.4bn was used to settle what was owed to creditors, he says, at 12 cents in the rand.

"The remaining half was then used to settle a certain portion of the retrenchment payouts, as well as the operational shortfalls because the entitity's revenues are much lower than its costs, so it is bleeding a cashflow every month."

Anoosh Rooplal, Business Rescue Practitioner - Sapo

Considering how dire the situation is, is it really worth saving the Post Office?

Rooplal explains why he thinks it is.

"The R3.8bn is critical for the next part of our business rescue plan, and the bulk of that is intended to be used to upgrade infrastructure."

"That's what were trýing to implement because we're actually on track with our plan. It's just a matter of getting the funding."

"It's a very valuable piece of social infrastructure. That's how we refer to it because we have a social mandate at the end of the day... unlike commercial operators who can cherrypick and close down non-profitable stores, we dont have that luxury."

Anoosh Rooplal, Business Rescue Practitioner - Sapo

For more detail, listen to the interview audio at the top of the article