Jansenville Post Office failure petition: SAPO response; with Deputy Minister

Meeting report

The Chairperson welcomed everyone present and acknowledged the presence of the deputy minister. he announced that the Committee had new members who had just joined, but they were attending today as part of the quorum and observing. Once the new Members have been ATC’d, they will become the official Members of the Committee.

Mr Z Mbhele (DA) introduced the new Members of the Democratic Alliance who were joining the Committee. These Members were Mr S Malatsi and Ms Tsholofelo Bodlani. The Members have not yet been ATCed, once they have been ATCed, they will become official members of the Committee.

Jansenville / Klipplaat residents petition
Ms Samantha Graham, MP from the Democratic Alliance and petitioner, gave a briefing on the petition. She commenced with the background of the municipality, which is in the Eastern Cape, the Dr Beyers Naude Local Municipality, which was amalgamated in 2016. It is the third-largest municipality, geographically in the country. It is a rural municipality with a lot of challenges. Although the population is only 81 000 and at least 51% are indigent. The amalgamation has been a tough transition and the money is not enough.

As for the Jansenville Post Office, there are some businesses in the area and the unemployment rate was not as high as Klipplaat where it reckons an 80% unemployment rate. There is not much economic activity. The former is the economic hub for the area, and it is 33 kilometres from Klipplaat. People from Klipplaat have to pay R80 for a round trip to and from Jansenville, it is a massively poor area and it was declared a poverty site by the Department of Social Development and grants are a major source of income in the area.

The petition raises the lack of planning around money for the Jansenville Post Office because it runs out of money. People travel from Klipplaat and surrounding areas using transport with the view of paying for it on the return trip. However, when they arrive at Jansenville Post Office, there is no money and elderly people end up sleeping in the street because they cannot go back to their homes. Now and then the police have assisted to take people back to their homes.

Allegations were made that the person responsible for the post office was not opening and closing according to the official operating times of the Post Office. It was alleged she was running a loan shark scheme with her husband collecting the money from the recipients on grant collection day. The husband waits outside and demands money from them. It was also alleged that they sell alcohol outside the Post Office in the car park to people collecting social relief grants. There are instances where the husband is said to be operating the Post Office even though he was not employed by the Post Office. She did not have any evidence of this, but these allegations must be taken seriously.

Since the petition was submitted, Mr Tommie van Rooyen, SAPO Eastern Cape Area Manager, contacted her and set up a Zoom meeting to speak about the matters raised in the petition. He explained that the money must be ordered a month in advance for the remote post offices and can only be replenished once during and at the end of the month. The money running out was mainly due to SASSA making a series of back-payments, which is money not accounted for in the planning phase and so the money runs out. Mr van Rooyen now alerts her when one of the post offices is about to run out of money and she contacts the ward councillors who in turn contact the community groups. This has had a huge impact on addressing this challenge of money running out of money. Some days, it would take five or six days for the money to be replenished. It was also communicated to her that a spot check at the post office was done to ascertain whether everything was operating properly. She also spoke to the councillor in that area who confirmed that there was an improvement and not many complaints since this intervention.

She had submitted a written parliamentary question to ascertain details about the post offices in her constituency. They were in privately owned buildings with Jansenville post office having three months' rental arrears while Graaff-Reinet post office was in arrears for 14 months. The owners of the building are on the verge of closing the doors as the only recourse as half a million in rental due was a lot of money. If the doors are closed, there is no alternative for the people to access post office services. The threat of the post office closure was weighing heavily on the residents.

Department of Communications and Digital Technologies (DCDT) response
Ms Nonkqubela Jordan-Dyani, DCDT Director-General, responded that the Department has had continual engagements with the Post Office on this matter. One of the biggest challenges was addressing the financial constraints. DCDT will continue to engage to ensure that SAPO still honoured its obligations, and the Department is committed to finding an optimal way for SAPO to deliver. Whilst the interventions are in progress, the Department is aware of the negative impact on the communities and it continued to implore SAPO that there should be less destructiveness.

South African Post Office (SAPO) Board response
Mr Sipho Majombozi, Acting Deputy SAPO Board Chairperson, responded to the possible closure of the Jansenville post office. It is in a dire state financially and this is a legacy issue. For the past three financial years, what has made it worse was the lack of funding. When most of the present Board was appointed, there was an expectation of funding but without warning, no funding was made available. This affects the post offices across the country, especially in remote areas. The Department has asked SAPO to come up with a turnaround strategy. However, any strategy would require resources and we are hoping that this is coming soon. The Post Office is becoming unattractive to all the stakeholders that it seeks to serve. No matter how much effort is put into the turnaround strategy, the lack of resources would be counterproductive. There was an engagement with the Committee in the past and some challenges mentioned today had already been aired.

South African Post Office response to Petition
Ms Nomkhita Mona, SAPO CEO, provided the background to the Social Relief of Distress (SRD) grant payments in the Eastern Cape SAPO branches in question; challenges faced in the payment of the SRD grant; mitigation plans; Jansenville/Klipplaat petition and regional interventions to correct the concerns raised.

SAPO started the payment of SRD in May 2020. The SRD grant was initially introduced for three months. SAPO Eastern Cape has paid 1 346 518 SRD beneficiaries since the inception of this grant type. The Rand value of the SRD payments made to date is R1 024 750 460. The SRDs are paid at all SAPO branches in the Region (159 Post Offices). The SRD grant was presented to SAPO as a temporary Covid-19 relief grant resulting in SAPO being unable to enter long term supplier contracts. The rental for the branches has also been paid in full and there was no longer the threat of being vacated in the premises.

There are prevalent challenges with the SRD payment and these include depletion of cash; difficulty in accurately predicting beneficiary turnout; overcrowding at post offices; unavailability of regular cash-in-transit (CIT) service in some parts of the province causing SAPO to have ‘dead areas’ which are covered by ad-hoc CIT services; high cost of ad-hoc CIT (cash in transit) services in the ‘dead areas’- R130 000 per month for four drops and that increased criminal attacks (armed robberies/housebreaking), which disturb operations for days or weeks.

Ms Mona highlighted the mitigation measures for each of these challenges.

As for the petition, the Department informed SAPO on 7 December 2021 of the Jansenville / Klipplaat community petition and requested SAPO to attend to it and provide feedback. On 9 December 2021, the ‘Your Views’ segment of the Herald Newspaper ran a story on the poor service that the Jansenville/Klipplaat SRD grant beneficiaries were experiencing which had led to the community putting together a petition. The Eastern Cape SAPO Management team contacted the Member of Parliament referenced in the article to better understand the complaint. The major concern was the unavailability of cash to pay approved beneficiaries regularly. Further engagements took place with management and mitigation plans were agreed upon by the parties.

In conclusion, cash depletion and outages would be closely monitored and avoided – the SAPO team explained the CIT challenges faced in ‘dead areas’. Secondly, a WhatsApp group was created between SAPO and local councillors to improve the communication gap that existed. Thirdly, an additional staff member was transferred from another post office to increase the service capacity of the branch. An unannounced visit/sting operation would be conducted to investigate the malpractice allegations – the visit was done on 21 January 2022. Lastly, the branch would receive more attention from the Area Manager to monitor service and ensure service failures are reported timeously and corrected.

Discussion
Ms Z Majozi (IFP) welcomed the response from SAPO saying that after the petition briefing, Members were not left guessing what was to become of SAPO but there was some hope that it was redeeming itself. However, she was uncertain if the SAPO Board and management – the leadership – was still intact or not. Secondly, she did not see any financial aspects provided in the SAPO response. She would have liked to see how financially sound the entity was because that would assist the Committee to ascertain if there was the ability to change its course.

Mr T Gumbu (ANC) asked if only one person had operated the Jansenville post office.

Ms N Kubheka (ANC) welcomed the petition and applauded the petitioner for raising this with the Committee. She was pleased that even though the petitioner raised many concerns, that there was an improvement in some areas, and this gives the Committee hope that the commitments made to the Committee, will be lived up to. What is the intervention plan to address the challenges raised by the petitioner?

She encouraged the SAPO CEO to keep following up on the allegations and concerns raised. The allegations must not be taken lightly and SAPO management needs to follow up on these and ensure that where necessary, consequence management is implemented, and the full might of the law applied. The Committee also needs to ascertain how best it can assist because funding remains the core issue of the substantive myriad challenges of the entity.

SAPO response
Ms Mona replied that SAPO has seen over the years the exodus of senior qualified executives. The remaining executives were in acting positions due to financial difficulties and the inability to pay salaries. It is a circle – if there are not the relevant skills in the entity, it will also face challenges. The new strategy talks to SAPO becoming a logistics and warehouse hub and this will need additional specialized and critical skills.

The Jansenville post office had only one staff member which explains why it would be closed at certain times but there are several post offices that have a single staff member. This is only in small and remote towns, and this used to work because before the SRD grant those offices were not busy. We have managed to move a new staff member to join the office manager in that post office.

The allegations will be taken seriously as one cannot allow rogue elements to abuse Post Office resources. The new Post Office will now be customer-based – this is the culture that will be inculcated in the new strategy.

Funding and support remained an issue largely due to addressing the historical debt. The bulk of the funding, if it comes, will be used to implement the new strategy. It would not be profitable to utilize the funding to liquidate the debt and start over. SAPO would ensure that the money was also used to fund the new strategy implementation so we can see the entity turnaround.

Deputy Minister’s remarks
Deputy Minister Philly Mapulane said that at an appropriate time, the Department will come and present the newly developed strategy with the SAPO Board and its management. There was much hope for SAPO with the announcement that will be made tomorrow as part of the Budget Speech by the Minister of Finance. We are in a difficult space with the SAPO finances. The focus is to turn around the entity and ensure that there is sufficient funding available to run it as a going concern.

The Chairperson said that the petition before the Committee related to a specific post office but there were myriad challenges at SAPO that were concerning and needed to be addressed swiftly. The Committee would still require a presentation from SAPO on its finances and its status as a going concern.

Mr Mapulane confirmed that there were critical vacancies on the SAPO Board as the Department had received about four resignations. It was in the process of filling in those vacancies and the process has commenced. The Minister took the view that instead of filling the Board Chairperson vacancy, it should allow the process of applications and fill all the vacancies at once and then appoint the Board Chairperson and Deputy Chairperson.

Ms Majozi suggested that the Committee should also investigate the SAPO organogram before the critical vacancies were filled.

Ms Graham thanked the Committee for receiving the presentation. The feedback received from SAPO was welcomed as the small towns are often places that get forgotten about. She suggested that SAPO had the willingness to keep the spirit of engagement with the stakeholders, but she would be monitoring the ongoing concerns and was pleased there was now an open line of communication that has been established.

The Chairperson appreciated that there was a need to do more. Complaints about the post office are received from various constituencies across the country. Sometimes those challenges need immediate attention as part of oversight work because as they cannot wait for a hearing. There are several MPs that have voiced these concerns to the Committee before in different parts of the country, so it is not something that is taken lightly, especially when it comes to post office closures and the need for SRD grant payments. He raised these points to highlight that the Committee was on a quest to ensure that these matters are resolved as they keep coming up about the importance of the post office in rural or remote areas. People rely on government services from the post office, and we cannot afford to allow it to fail.

The Chairperson said further feedback and the outcome of the investigation into the allegations made were expected to be submitted to the Committee.

The Chairperson noted that there had been turnaround strategies developed and funded before, but the intended result was not seen. If we are going to deal with the matter thoroughly, we must also understand the problems experienced before SAPO implemented a turnaround strategy. This was the case even with the SABC before. We must specifically focus on ensuring that the previous challenges did not return after the turnaround strategy has been implemented. He suggested that the Committee be briefed on the SAPO turnaround strategy and funding so that both can be ventilated fully. He did not want to venture into this today as it would not do it justice but the Committee was fully aware of the challenges experienced by SAPO.

Deputy Minister Mapulane said that the Department would be pleased to come back to brief the Committee on SAPO’s finances. It is necessary because it concerns the future of the post office. We are hoping that the pronouncement made tomorrow will be positive for the Post Office. The entity is facing serious difficulties financially, but the Department was working on this with Treasury. The Department and the SAPO Board have adopted the new turnaround strategy, which is called the Post Office of Tomorrow. Hopefully, this will be done in the coming weeks before this term ends. We believe that this strategy could turn around the Post Office, but this is dependent on the funding pronouncement made tomorrow. He left the Committee with the hope that the Department has received funding from Treasury to keep SAPO a going concern. Part of the turnaround strategy is the architecture of the SAPO structure. The filling of positions must be aligned to the structure and the strategy that has recently been developed.

The Chairperson welcomed the comments, saying the Committee has resolved to have another engagement with SAPO to present the new strategy after the Budget Speech.

The Committee considered and adopted minutes dated 7 December 2021 and 15 February 2022 and the meeting ended.