Post Office embark on contract review to derive savings

In October 2018, SASSA entered into a contract with the Post Office to take over social grant payments.

The management of the South African Post Office (SAPO) has been instructed to review all SAPO contracts to ensure they are still relevant to the business requirements.

This as the board, which was appointed last October, has set a 90-day deadline to stabilize the financial position of the organization.

“The board took a decision that management should embark on a contract review exercise in order to identify opportunities to derive much-needed savings,” said Colleen Makhubele, chairperson of the SAPO board.

Makhubele said the board also approved a strategy to ensure the fast-tracking of Social Security Agency of South Africa (SASSA) payments, especially in areas lacking adequate infrastructure.

In October 2018, SASSA entered into a contract with the Post Office to take over social grant payments. More than 70% of the country’s social grant beneficiaries receive their money through the Post Office’s SASSA card.

In the medium term, the Post Office plans to reposition itself to become an integrated service solutions provider. It wants to deploy its vast distribution network, warehouses and retail infrastructure as a service platform that can be leveraged for profitability, innovation and service delivery. 

The board said its intention is for the Post Office to become a payment platform and distribution network of choice for government.

Beyond the SASSA grants, the Post Office also distributes medicine on behalf of the Department of Health and school textbooks for the Department of Basic Education.

Further, the Post office plays a central role in the registration of poor households for set-top decoders as part of the digital terrestrial television migration and thus far, it has registered more than 1.4 million beneficiaries. Almost 400 Post Office branches are also serving as motor vehicle license renewal outlets.

“We are driving management aggressively towards a pronounced strategy of a Post Office that is relevant in the digital economy and one that is central to the provision of Fourth Industrial Revolution products and services; a Post Office that is trusted and reliable to deliver, deliver on time and deliver the parcels unviolated,” said Makhubele.

The new board of the Post Office was appointed in the third quarter of 2019. It is working to confront serious challenges, including Auditor General findings against the organization. 

(With Inputs from South African Government Press Release)