Status Update on SASSA Readiness: SAPO briefing; SAPO Turnaround, with Minister

Telecommunications and Postal Services

20 March 2018
Chairperson: Mr J Mahlangu (ANC)
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Meeting Summary

The Committee heard a status update from SAPO on its SASSA Readiness and a briefing on SAPO going forward.
 
SAPO: Status Update on SASSA Readiness
The Committee was concerned about the delay in the issuing of a banking license to the Post Bank. What. What were the Department’s concerns and if it was legislation, the Committee could make the necessary legislative changes?
Minister Siyabonga Cwele of the Department of Telecommunications and Postal Services replied that he had held meetings with the Minister off Finance on the issue He said banks fell under the Department of Finance and the Banks Act needed to be amended so that certain definitions on public companies were aligned with the Companies Act. There was then a challenge in processing the legislation. Treasury wanted to do an omnibus amendment, but this risked the amendment being stuck on some other issue. The Department had offered Treasury legal assistance on the issue. The Department would take up the issue with the new Finance Minister.
 
He said another issue was the Post Bank’s controlling company. The Department’s view was that for the sustainability of the Post Office, the Post Bank should not be separated completely from it because of their complementarity and because their infrastructure was integrated and interdependent. If one separated the Post Bank from the Post Office, one might as well kill the Post Office or make it permanently government subsidised. Treasury was of the view that SAPO should be an independent company. The Post Office was the institution of service delivery to the poor. He said the main aim of seeking a banking license was to attain financial inclusivity for the poor.
 
On the issue of SASSA, he said there were two key challenges which the Inter-Ministerial Committee (IMC) had identified. The first was that there were a lot of vacancies where people were in acting positions. SASSA required competent permanent staff members to execute its plans. The second was legislation. The then Minister had been advised to amend legislation and the new Minister was putting a lot of effort into the project. He said the cash payment system, while convenient was the most expensive and risky method and the Post Office was trying to reduce the figure for that form of payment.
He said the Constitutional Court had ordered the Post Office to appoint a new system by the 31st. The cash management system had been done. The only appointment that was delayed was the appointment of cash disbursing agents, other than CPS and this was because the tenderers had asked that they be given more time. The tender would be awarded in early April. Despite this, he said that there would be contingency measures in place and which had been submitted to the Constitutional Court. He said there had been a slight delay in the card production process. He said the SASSA project was a multibillion rand project so a phased in process was needed therefore the SASSA card’s validity had been extended to the end of the year. The Post Office would be making the first payments on 3 April. The only challenge was reducing the number of cash beneficiaries from 2.8m to 1m. He said the Post Office was disturbed by Grindrod CPS, the current service provider who was aggressively marketing their products. He said it was unfair and had raised the matter with the Constitutional Court because the protection of information was being abused. He said the cash in transit would be secured by the police and the army.
 
SAPO said most of the details were already in the public domain and the presentation would focus on the crux of the matters, the phased in approach of the card swop, the question of the holding account, card production, the biometric engine, and the migration of cash to non-cash disbursements,
 
Members asked what would happen on 22 March. Members were concerned over the confusion of the phasing in. How equipped were the staff and SASSA to explain the phasing in? How much would the business case to upgrade the network cost and how would it be funded? Members wanted clarity on the statements around biometrics. Members were concerned that the contract with SASSA was for five years. Was this limitation because of public finance regulations or legislation? Members wanted clarity on the dry run. To what extent the police could be trusted with money? Were beneficiaries were obliged to move to a new card or could they remain with Grindrod? Was the network improved? Were all branches supplied with biometric scanners and were they connected in parallel and not in series? Was it legal for Grindrod to aggressively market their cards and what would SAPO like the Constitutional Court to rule on the matter?
What would the Committee be faced with if the Constitutional Court ruled against SAPO’s application for extension?
 
SAPO Going Forward
SAPO said that as it was currently structured, managed and funded, it was not financially sustainable, that SAPO had regressed so far technologically, that it could not offer a competitive service. SAPO would need to invest, not only in technology, but in basic customer interfaces to compete. There was a possibility of partnerships or joint ventures with established players as an alternative to depending on organic growth. The Post Bank had always been central to the diversified revenue strategy of SAPO, with the expectation that it could contribute up to a third of total revenue once earnings from lending become a reality. If SAPO did not get government business to help it fund its cost base and required investment in upgrades and growth, SAPO would continue to require direct government subsidies. SAPO could become an entity which could attract its own capital and deliver reasonable returns to government. The details of the SAPO property bond of R1b still needed to be presented to Board. SAPO had 444 owned properties which would be used as collateral for the debt. The details of the SAPO retail bond of R1b still needed to be presented to the Board. SAPO was looking to partner with organisations that had technical solutions and products that SAPO could leverage off. Partnerships would be crucial to SAPO to close its investment gap and being able to provide competitive offerings in banking and e-commerce.
 
Members said that all the SAPO APPs had been about bringing SAPO to profitability but now the CEO was saying that SAPO would not be profitable. Mr Barnes was quoted as saying that revenue was not made up and members wanted to know when revenue figures were made up. A turnaround of SAPO had been promised but the Post Office continued to rely on government subsidies. Members were concerned about the two-month backlog at the JIMC. What was the current backlog with deliveries? Members said there had been commitments that the conveyor system would be running by the end of March. Members said people were being put out of business because of not being paid by SAPO. Members wanted more details on the billion-rand network upgrade. Members wanted an explanation on the new loans of R2m and the recapitalisation of it in 2018/19. Members said SAPO had presented these partnership scenarios before and it seemed there was no progress on forming these partnerships? What was the bottleneck? Members said SAPO had spoken on bond issues the previous year and the matter had been pending with the Board for eight months. Did the Post Office have some discussions within the Board and the Minister to change the solvency and liquidity issue around? Was there any buy-in from the Board to the new plans?
 
Members asked the Minister what his take was on the status quo in SAPO and what interventions could be expected in terms of public service responsibilities. Members said a decision had to be made on whether the Post Office had to be viable or serve a public service delivery vehicle. Members were awaiting the report on the network rollout. Members believed there was an ideological split. The DA wanted to see if the Post Office could be privatised while others wanted parts of the Post Office privatised. She said there could be an entity with a combination type PPP fulfilling the crucial role of paying social grants in the future.
 

Meeting report

SAPO: Status Update on SASSA Readiness
The Chairperson raised the Committee’s concerns on the delay in the issuing of a banking license to the Post Bank. This delay might in the past have been because of fears over state capture but that threat was now gone.
 
Ms J Kilian (ANC) said the matter had been ongoing for some time and asked whether the Minister was ready to give feedback. If not the Department and Treasury needed to brief the Committee on this issue because the Committee needed to get clarity, as it was a matter that was outstanding for several years. What were the concerns and if it was legislation, the Committee could make the necessary legislative changes?

M Siyabonga Cwele, Minister of Telecommunications and Postal Services, said he had held meetings with the Minister of Finance on the issue because it was a long outstanding issue which had been raised by the South African Reserve Bank (SARB) in the previous year because the matter was in line with the Banks Act. He said banks fell under the Department of Finance not Trade and Industry which oversaw the Companies Act. He spoke to the changes in the Companies Act which now included state owned companies and the Banks Act needed to be amended so that certain definitions on public companies were aligned. He said that he had approached the finance committee the previous year to expedite the amendment which was to include state owned companies in the definition of public companies in the Banks Act. There was then a challenge in processing the legislation. Treasury wanted to do an omnibus amendment, but this risked the amendment being stuck on some other issue. The Department had offered Treasury legal assistance on the issue. The Department would take up the issue with the new Finance Minister.
 
Minister Cwele said another issue was the Post Bank’s controlling company. The Department’s view was that for the sustainability of the Post Office, the Post Bank should not be separated completely from it because of their complementarity and because their infrastructure was integrated and interdependent. If one separated the Post Bank from the Post Office, one might as well kill the Post Office or make it permanently government subsidised. Treasury was of the view that SAPO should be an independent company. The Post Office was the institution of service delivery to the poor. The main aim of seeking a banking license was to attain financial inclusivity for the poor. In 1995 the Ministerial Commission on Finance was tasked to look at how one could have a different mechanism over development financial institutions like the Post Bank which could not be regulated in the same way as commercial banks. The only thing that came out of the 1995 project was cooperative banks. There had been 13 cooperative banks with only three surviving. He said initially they had thought the problem was with the Reserve Bank, but he did not believe the problem in getting a license lay with the SARB.
 
On the issue of SASSA, he said there were two key challenges which the Inter-Ministerial Committee (IMC) had identified. The first was that there were a lot of vacancies where people were in acting positions. SASSA required competent permanent staff members to execute its plans. The second was legislation. The then Minister had been advised to amend legislation and the new Minister was putting a lot of effort into the project. There was a false impression that government did not care for the poor and government wanted to dispel this myth. Some aspects of the grant payment system should be changed. The cash payment system, while convenient was the most expensive and risky method with a unit cost that was twenty times higher. There were 2.8m beneficiaries being paid out in cash per month and the Post Office was trying to reduce that figure by interacting directly with the beneficiaries to get their money using the SASSA card and a pin from any bank. He hoped MPs would communicate and encourage this form of payment.
 
Minister Cwele said the Constitutional Court had ordered the Post Office to appoint a new system by 31 March 2018. The cash management system had been done. The only appointment that was delayed was the appointment of cash disbursing agents, other than CPS and this was because the tenderers had asked that they be given more time. The tender would be awarded in early April. Despite this, he said that there would be measures in place and which had been submitted to the Constitutional Court, like for example transporting those people to the nearest cash payment point. There had been a slight delay in the card production process because SASSA ‘had come a bit late’. The SASSA project was a multibillion rand project so a phased in process was needed therefore the SASSA card’s validity had been extended to the end of the year. The Post Office would be making the first payments on 3 April. The only challenge was reducing the number of cash beneficiaries from 2.8m to 1m. The Post Office was disturbed by Grindrod CPS, the current service provider, who was aggressively marketing their products. He said it was unfair and had raised the matter with the Constitutional Court because the protection of information was being abused. The cash would be secured by the police and the army.
 
Mr Comfort Ngidi, Board Chairperson, SAPO, said the Board was doing everything possible so that the Post Bank could get its license. He said the payment of social grants by the Post Office was also of the state developing capacity. The agreement with SASSA was only signed on 17 November 2017 while the service agreement was only signed on 8 December 2017 and this caused some delays because protocols had to be followed. The agreement gave SAPO the responsibility to provide services for five years.
 
Mr Mark Barnes, CEO, SAPO, said most of the details were already in the public domain and he would focus on the crux of the matters. He said the presentation was exactly aligned to the quarterly report which had been submitted to the Constitutional Court.
 
The conflict that had arisen with the Constitutional Court was not their conflict as the Post Office had always said that there would be a phased in approach and the phased in approach was a clause in the service agreement with SASSA. SAPOs responsibility was in taking over the electronic banking solution of the payment of social grants and this was currently with the Grindrod bank account.
 
On the question of the holding account, he said the hope had been that it would have been with the Post Office through the Post Bank because it would have been more convenient. The real issue was not whether they were a bank or not but whether they were a member of the national payment system. SAPO though still needed a transition period for the swopping of the cards to be in compliance with the court order which stipulated that CPS should have no involvement, not even the use of their card.
 
On the issue of card production, compliance with local banking requirements has meant a slight delay in the anticipated production of cards. There was a launch of the cards on 22 March which was more a PR exercise. Ie reason the swop out could not take place new beneficiaries would get the existing Mzanzi card.
 
He said Post Bank was capable of developing its own disbursement system on its own core banking system. It was possible for the Post Banks system to be moved over to SASSA.
 
On the biometric engine, he said the system would be commissioned the following week. New beneficiaries would start to be accepted from 3 April and swops on 16 April. Card swops would continue to 30 September.
 
On the migration of cash to non-cash disbursements, he said there had been detailed mapping of cash pay points and 860 branches were within the 5km radius. It was hoped that these branches would become substitutes for the existing cash pay point because of cost benefits and the smoothing out of crowds. SAPO had never wanted to be in the cash in transit business and he said that it would be in everybody’s interest for SAPO’s branch network to be used.
 
Discussion
Ms M Shinn (DA) asked what would happen on 22 March 2018. She was concerned over the confusion of the phasing in. How equipped were the staff and SASSA to explain the phasing in? How much would the business case to upgrade the network cost and how would it be funded?
 
Ms Kilian noted that biometrics had been mentioned in the presentation and its replacement by another system, could this be clarified. Her concern was that the contract with SASSA was for five years. Was this limitation because of public finance regulations or legislation? She asked the Minister whether it was wise for government to put people’s livelihood at risk to go through another handover process.
 
Ms D Tsotetsi (ANC) wanted clarity on the dry run. She did not see valid reasons why things should not be happening, and that the IMC would have speeded up the process. On police protection for the cash payments, she asked to what extent could the police be trusted with money.
 
Mr C Mackenzie (DA) asked if beneficiaries were obliged to move to a new card or could they remain with Grindrod. Was the network improved? Were all branches supplied with biometric scanners and were they connected in parallel and not in series?
 
Ms Kilian asked if it was legal for Grindrod to aggressively market their cards and what would SAPO like the Constitutional Court to rule on the matter.
 
The Chairperson asked what the Committee would be faced with if the Constitutional Court ruled against SAPO’s application for extension.
 
Mr Noble said that on 22 March there would be a live demonstration and it was a marketing exercise on the look and feel of the card.
 
On the card swop, he said there was a huge communication obligation and the fourth quarter reports detailed the PR and communications that would be happening, however even if someone was uninformed the grant would still be paid because the SASSA card was still valid. On 30 September all cards would have been swopped and on 30 December the old cards would become invalid.
 
He said the network upgrade was underway. At this stage there was no obligation to pay cash as SAPO had not tendered for the cash payments.
 
He said the biometric system had been outsourced and tested and was an alternative to the current one.
 
He said the extension of the five-year term of the SASSA contract was not for him to engage in, but it would not entail another transfer as SASSA had insisted that the programme be insular.
 
On the matter of the police and the defence force, he said this only applied to physical cash delivery and unless an extension was granted, this would be a challenge. SAPO was not involved in cash payments so it was a SASSA matter.
 
He said at issue was the rate of transfer from the Grindrod card to the new card of SAPO. If there had been an agreement, this transfer would go smoothly, but there was no cooperation or willing parties so Grindrod was encouraging account holders to move into banking accounts with banks other than Post Bank. If all accounts were transferred thus, then there would be no accounts to transfer to the Post Bank.
 
If the Constitutional Court did not grant an extension for the cash in transit payments it was a matter for SASSA. If the Constitutional Court did not grant an extension for electronic banking, it would not affect the payment of grants to beneficiaries.
 
Minister Cwele said the IMC was satisfied with the reporting requirements of SAPO and its readiness. The discomfort was caused by the delay in the start of the system.
 
On the issue of the card swop, he said card swops were never done on one day. The relationship between SASSA and SAPO was not just via the PFMA but also the InterGovernmental Framework Act (IGFA), so it was legal for SAPO to continue after the five-year contract.
 
He said SAPO was in compliance with the court order. He did not think there would be chaos after 31 March. If the court did not grant SAPO’s request for an extension, then there was a clear plan on what SAPO would do. It would use the new system and get some machines to go to the areas further than five km from a SAPO pay point and mobilise all state capability like the police, the majority of whom were doing good work. He said the biggest risk was the cash. He said the competitors were not keen on intergovernmental cooperation as it was cost effective.
 
Mr Ngidi said that Grindrod and SAPO had agreed on the hybrid model and it was legal for Grindrod to entice beneficiaries to open accounts with them.
 
He said SAPO needed to improve its communication on all aspects of what it was doing to the public.
 
On the five-year agreement, he said that in terms of the SASSA Act, SASSA was the only entity who could pay the grants and if they could not, they had to appoint a service provider. SAPO did not want to be SASSA, it merely wanted to provide a service to SASSA.
 
Mr Noble said all costs were factored in the economic model regarding pricing.
 
He said there were alternative cash dispensing machines available in the market.
 
He said that while SAPO was linked with SASSA, SAPO had very distinct responsibilities and it would meet all those responsibilities.
 
SAPO Going Forward
Mr Noble said SAPO, as it was currently structured, managed and funded, was not financially sustainable, that SAPO had regressed so far technologically, that it could not offer a competitive service. SAPO would need to invest, not only in technology, but in basic customer interfaces to compete. There was a possibility of partnerships or joint ventures with established players as an alternative to depending on organic growth. He said Post Bank had always been central to the diversified revenue strategy of SAPO, with the expectation that it could contribute up to a third of total revenue once earnings from lending become a reality. If SAPO did not get government business to help it fund its cost base and required investment in upgrades and growth, SAPO would continue to require direct government subsidies. He said SAPO could become an entity which could attract its own capital and deliver reasonable returns to government.
 
He said there had been an 8.47% improvement in the delivery standard of mail and the 14% decline in revenue in 2014/15 had been reduced to a 4% decline in 2017/18. He said the public service mandate funding of R399m p.a. stopped in 2011 and SAPO now incurred annual public service mandate costs of R769m.
 
He said Human Resources cost optimisation adopted a phased approach. The first phase was continuous reduction overtime and extended hours. The second phase was redeployment of staff and the third phase was the outsourcing of non-core activities. Employees were being up skilled and re-trained.
 
He said there would be a funding shortfall of R766m for the 2017/18 financial year. SAPO projected a net asset value of R3,6b as at 31 March 2018. R800m was required to settle outstanding liabilities. As at 31 March 2018 SAPO would require going concern guarantees of R1,6b in order to pass liquidity tests.
 
The projected surplus of R785m for 2018/19 was dependant on the achievement of revenue and cost initiatives, recapitalisation funding of R800 million, public service mandate funding of R769 million, and new loans of R2b through property and retail bonds.
 
He said details of the SAPO property bond of R1b still needed to be presented to the Board. SAPO has 444 owned properties at a market value of R2,7b as at 31 March 2017 and the property portfolio would be used as collateral for the debt. The funding would be used to repay the interim loan facility of R400m and for capital infrastructure investment.
 
On the SAPO retail bond of R1b, he said the details of the bond needed to be presented to Board. It was for a 10-year term and guaranteed by National Treasury. The bonds issued would need to be listed on the Bond Exchange and SAPO could consider offering the issue through the SAPO branch network. Treasury would effectively be underwriting a higher yield than the deposit rate to citizens of commercial banks.
 
He said SAPO was looking to partner with organisations that had technical solutions and products that SAPO could leverage off. Partnerships would be crucial to SAPO to close its investment gap and being able to provide competitive offerings in banking and e-commerce. He then spoke to the envisaged corporate structure.
 
Discussion
Mr Mackenzie thanked Mr Barnes for his honesty but said that all the SAPO APPs had been about bringing SAPO to profitability but now the CEO was saying that SAPO would not be profitable. He quoted Mr Barnes saying that revenue was not made up and wanted to know when revenue figures were made up. Mr Barnes had promised to turn SAPO around but had not and for the Post Office to continue government would have to subsidise the Post Office. He said the bailouts to the Post Office of R3.7b was effectively a government subsidy. He was concerned about the two-month backlog at the JIMC. What was the current backlog with deliveries? There had been commitments that the conveyor system would be running by the end of March. He said to get the Post Office back it needed to get its customer base back but confidence in the Post Office had declined because of people’s experience doing business with the Post Office. The bailout that had been asked for was to settle with creditors and the understanding was that SAPO would not have creditor problems again. People were being put out of business because of not being paid. He wanted more details on the billion-rand network upgrade. He wanted an explanation on the new loans of R2m and the recapitalisation of it in 2018/19.
 
Ms M Shinn (DA) said SAPO had presented these partnership scenarios before and it seemed there was no progress on forming these partnerships? What was the bottleneck? She said SAPO had spoken on bond issues the previous year and the matter had been pending with the Board for eight months.
 
Ms Kilian said that she had heard for many years that there had been structural problems. The type of business at the Post Office needed different skills so she liked the idea of reskilling workers. It was important for the Committee to understand the public service mandate and the pressure on SAPO to take on workers who had worked only during peak periods. The additional expenses of the excess workers arose from the use of labour brokers who had saddled the Post Office with excess workers. It was time to streamline the Post Office. Did the Post Office have some discussions within the Board and the Minister to change the solvency and liquidity issue around? Was there any buy-in from the Board to the new plans?
 
The Chairperson asked the Minister what his take was on the status quo in SAPO and what interventions could be expected in terms of public service responsibilities. He said a decision had to be made on whether the Post Office had to be viable or serve a public service delivery vehicle. He said maybe separating the two as a business and as a public service mandate was an option. This needed a thorough discussion and in his view the Post Office could be turned around.
 
Minister Cwele said the public mandate universal service obligation needed universal service funds. This subsidy was stopped in 2011. The Digital Development Fund would deal with access issues to the poor. He said the Post Office could never make money on the 1kg letter regulation. It was wrong legislation which needed to be corrected by the Post Office Amendment Act.
 
On the sustainability of SAPO, he said that if one wanted to kill the Post Office then one just had to remove the Post Bank. He said the Post Office courier services could be profitable. Courier Freight Group (CFG) had not been viable and should be allowed to come to an end but the other courier services were viable.
 
Regarding partnerships with government business, he said these plans could not be finalised until line management buy-in was attained. He said the then Deputy President had said that the Post Office had to fish for government business as they would not automatically come to the Post Office. He said it had been difficult fishing. The Department had been working with Universal Postal Union (UPU) on developing an e-commerce platform.
 
He said he was not keen on frequent turnaround plans. He said all the matters were identified in the diagnostics for the current turnaround strategy. The real challenge was funding of the turnaround. PPPs were mooted, but the Department did not want to increase government risk on state companies.
 
On the separation of commerce from public service mandates, which was a key finding of a presidential review commission, he said the public service mandate had to be costed. All agreed on the need for a sustainable Post Office. He said there had to be consequence management. He said they would not deal with workers until other issues were sorted out, so they needed to demonstrate to workers that action was being taken against executives who were not delivering.
 
Mr Ngidi said Mr Noble made some submissions to the Board and the Board had supported all of them. Some of them need to go through government processes. He said SAPO had an unfunded mandate of R700m. he said their hope had increased when Treasury said they would get R3.7b but this had been used to pay what had been owed to banks. The Board fully supported Mr Noble. He said the Board felt ICASA had let the Post Office down as they had not enforced the work reserved for the Post Office.
 
Mr Noble said he had been at the Post Office two years and his goal was to build an organ of state, but this has changed as he got a deeper understanding of the entity.
 
It was disingenuous to be quoted verbatim when trying to describe a process. He said that on arriving at the Post Office if he was given revenue forecasts, he had given the benefit of the doubt to the executives, but this had changed over time where the probability of the figures being attained was zero probability.
 
Mr Mackenzie said he took exception at being called disingenuous as it implied he was dishonest while quoting Mr Noble.
 
Mr Noble said he had never said that he would only focus only on mail.
 
On bailouts being a subsidy, he said a subsidy had to have a specific purpose.
 
He acknowledged that some letters took longer or never got delivered and he invited Mr Mackenzie to join him on a walkabout of the Johannesburg mail centre but SAPO was on an improving track. He had hoped the conveyor belt would have been replaced, but the reason was that there was no funding and there were other priorities.
 
Regarding creditor settlement, he said he had become personally involved in the management of creditors. There were legal and other aspects involved. No creditors could be favoured.
 
He said the network upgrade tender went through the proper tender processes and was approved by the Board.
 
He said the R800m bailout was to address current creditors
 
On progress regarding partnerships, he said he had a list of potential partners. He had not presented them to the Board because the executives had not yet developed them into business cases and there was a need to develop business skills within the Post Office first. There was also a need to look at the PFMA and his homework was not done. His view was that if treasury did not have the funds to invest, then they be allowed to go to the private sector for investment. The Board and the government were not to blame that partnerships had not been realised. He said the SONA had given hope when it had noted the need for SOEs to engage in PPPs.
 
On the bond issue, he said as an organ of state, bond issues required an extraordinary list of permissions. He said they were starting to approach the point where they could go to the capital markets. He said they had had a debate on whether SAPO was a public service or a commercial enterprise. He said if SAPO did not invest it would fall further and further behind competing courier companies who invested hundreds of millions of rand.
 
He said Telkom was a success story on being able to deliver on the public service mandate and a return on shareholders funds. He said the purpose of the meeting was to inform the Committee of a possible different course for SAPO going forward rather than relying on mail.
 
Minister Cwele said that what made real change in 2012 was to say here is the mandate, now execute it. If not, then you out. There should not be interference with the Board and a few exemptions should be allowed.
 
Mr Mackenzie said he was awaiting the report on the network rollout. He had been on the Committee for four years and there had been continual promises to return to profit which had not been delivered, so there was a credibility gap.
 
He said his comment on the conveyor belt system was because automation was the only way to improve delivery performance.
 
Ms Kilian said she believed the JIMC was a lot better. She knew that when the conveyor belt system was contracted, it was done without the transfer of skills to operators of the conveyor belt system.
 
She said she believed there was an ideological split. The DA wanted to see if the Post Office could be privatised while others wanted parts of the Post Office privatised. She said there could be an entity with a combination type PPP fulfilling the crucial role of paying social grants in the future. She said there was a need to look at legislative limitations which were creating obstacles. The Post Office had been stabilised, it had been streamlined but more could be done regarding performance management.
 
Mr Ngidi said that it was not all doom and gloom at SAPO. The SASSA contract would make a huge impact.
SAPO had implemented the public protector’s recommendations to move out of Eco Park and this was saving the Post Office R4.5m per month.
 
The meeting was adjourned
 

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