R4bn bailout requested by ailing Post Office would be money down the drain

The embattled SA Post Office, which requires a further R4bn in funding as adopted in its approved business rescue plan, continues to be bogged down by poor financial management, and operational and leadership lapses, Business Day reported this week. This was revealed by a team from the auditor-general during a sitting of the standing committee on public accounts in parliament on Wednesday

The number of letters sent through postal services has plummeted in recent years as consumers embrace technology, Sunday Times reported in April

The Post Office was placed under business rescue in July 2023.

In September last year it warned it would soon run out of money, putting it at risk of liquidation. Despite receiving R2.4bn funding allocation from the National Treasury in 2023, it said it needed a R3.8bn bailout from the government to operate.

In December the minister of communications and digital technologies, Solly Malatsi, revealed that about R176m had been paid just to its business rescue practitioners and consultants.

Though it was suggested recently that the Post Office could digitally transform rural SA if branches can become digital hubs offering Wi-Fi, e-government services and e-commerce access, the reality is that terminal mismanagement for years will make it hard for Malatsi to hand over another bailout to keep the ailing SOE afloat.