The South African Post Office (SAPO) has received a R381 million wage subsidy
Image: Bhekikhaya Mabaso/Independent Newspapers
The South African Post Office (SAPO) is set to receive a R381 million wage subsidy from the government, aimed at covering employee salaries for the next six months as part of the ongoing business rescue process.
The chairperson of the Portfolio Committee on Communications and Digital Technologies, Khusela Diko, described the approval of six months of income support for the Post Office as "a much-needed lifeline that the state is both morally and duty-bound to extend."
According to reports, this latest round of income support brings the total amount of government bailouts for SAPO to approximately R9.8 billion since 2014.
The funds will come from the Temporary Employer/Employee Relief Scheme (TERS), which was established to minimise job losses for companies facing distress by providing up to 75% of employees' salaries, capped at R241,110, for a period of 12 months.
The scheme is administered by the Department of Labour and Employment through the Commission for Conciliation, Mediation and Arbitration (CCMA).
In a statement issued to the media on Thursday, Diko said the amount marked an important milestone in the ongoing efforts to rescue and resuscitate the Post Office.
"The R381,297,863.83 wage subsidy for nearly 6,000 SAPO employees over a six-month period signals an important milestone in the ongoing work to rescue, resuscitate and ultimately futureproof the Post Office.
"The subsidy is expected to reduce SAPO’s cost burden and forms part of the building blocks towards the completion of the business rescue process,” Diko said.
Diko further stated that to qualify for TERS funding, applicants must present a viable turnaround strategy to the Adjudication Committee, which the committee believes has reasonable prospects of success.
“This step is steadily moving us towards the end of the business rescue process, thereby presenting an opportunity for the department to accelerate the process of developing a comprehensive partnerships strategy for SAPO’s revenue-generating streams,” she added.
In a formal request last year, the business rescue team of the SAPO called for an additional R3.8 billion in government support to ensure the sustainability of the state-owned entity during its ongoing financial overhaul.
“While the TERS funding is substantially less than the R3.8bn the business rescue practitioners had sought to return SAPO to full solvency and liquidity, this reprieve presents strategic choices for consideration by the department on how to reengineer our country’s designated postal operator,” Diko concluded.
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