South African Post Office Strategic Plan 2007-09: briefing

COMMUNICATIONS PORTFOLIO COMMITTEE
2 March 2007
SOUTH AFRICAN POST OFFICE STRATEGIC PLAN 2007-09: BRIEFING & APPOINTMENT OF ICASA COUNCILLOR

Acting Chairperson: Mr G Oliphant (ANC

Documents handed out:
Powerpoint Presentation South African Post Office Group

South African Post Office website

Audio recording of this meeting

SUMMARY
The Committee had been requested to consider the appointment of a Councillor for ICASA. The matter would stand over to the following week.

The South African Post Office briefed the Committee on its strategic plan for 2007-08 and 2008-09. The Post Office was currently processing 6 million items per year, reaching about 10 million addressees. Postbank was now handling around 1.3 million accounts, with transactional amounts and assets around R7.5 billion. There were many more outlets and customer points. 15 000 staff were employed. Support services were increasing. The Post Office had decided to broaden its “traditional” mail-focused base and form a financially viable business entity that would be able to give better and broader service delivery. It was working on branding and had divided its operations into mail, financial services, logistics and retail. It had exceeded targets. The challenges were outlined. The Post Office had managed to become one of the top ten providers in the world. The new legislation and the converged environment posed challenges. The design of new business platforms had now been completed and would be implemented in 2007 to 2009. A number of plans were tabled for each of the four units. The transport network and the infrastructure would be rationalised.  A transfer pricing model would be implemented. Recruitment and retention policies for staff had been enhanced. The new branding would help to assist customer service. The financial outlook was tabled fully.  The Post Office projected R5.4 billion of revenue, and expenses of R4.8 billion. It would be investing in IT and new properties. It would continue to receive a subsidy from National Treasury to fund universal service obligations. It projected an operational profit margin projection of 9% in 2007/08. The contributions to government initiatives and cluster programmes were set out.

The Post Office reported briefly on the activities planned for the World Cup, which included a range of new stamps, which would create awareness and promote stamp design as an art form. It would launch international competitions, a commemorative stamp in 2008, and publish a soccer legends book. 

Members noted that no questions would be asked about the current investigations pending, but that this issue would be addressed in May when the investigators’ report had been received. Questions by members included the current challenges, the subsidy from Treasury, the funds brought forward, further details on the business platform, the availability of electronic format telephone directories and the deficiencies in postal agencies, including lack of uniformity of opening hours and services. Other questions related to need to relocate the Robben Island post office, the toll free numbers, time frames for universal service obligations, human resources policies, and why the Post Office seemed to be constantly repositioning itself. Clarity was sought on medical aid liability for retirees, monopoly concessions on mail, mail delivery services, the audit committee, public telephones, whether the universal service obligations were yet being fulfilled and the intention to create public / private partnerships, and the costings on the subsidy.  Postbank’s role in social service grants, the capacity to deal with challenges, appointments of Board members and e-government communications campaigns were discussed. The Committee asked that during the May meeting the Post Office must address the issues of global mail trends and South African trends, security of mail, details of the work being done with Department of Home Affairs, and the operating surplus. 

MINUTES
Appointment of ICASA Councillor
The Chairperson indicated that he had received a request for approval of an appointment, to the Council of the Independent Communications Authority of South Africa (ICASA), of Dr Marcia Socikwa. The matter would be dealt with by the Committee on the following Tuesday. 

South African Post Office Group (SAPO): Strategic Business Plan 2007/08 to 2009/10: Briefing
The Chairperson indicated that the Committee would be visiting the Post Office in May when further questions arising from the briefing could be addressed.

Ms Matshoanetsi Lefoka, Acting Group CEO, SAPO reported that the Post Office was currently processing 6 million items per year, reaching about 10 million addressees. This was 7% higher than the previous year. Postbank was now handling around 1.3 million accounts, with transactional amounts and assets around R7.5 billion. There were many more outlets and customer points. There were around 15 000 staff. Support services were increasing.

SAPO faced several strategic choices. One was to remain primarily focused on subsidies and deliver traditional services. The second option involved a commercially driven post office with primary focus on shareholders. The third option would be a business enterprise focusing on financial viability.

Ms Lefoka tabled the financial targets for the 2006/07 year. This year SAPO had managed to exceed its projected delivery and was hoping to achieve its year deliveries this by the end of next month.

She said that the business environment was divided into four units: Mail accounted for about 60% of revenue. Financial Services offered Postbank, Logistics, which combined the Docex and CFG (courier service) and Retail covered the other services now being offered at the post offices. Challenges facing the postal services industry included the stagnation of mail volumes globally, increased demand and expectations from customers, the market becoming more competitive, expansion into financial services, and the need for skills upgrades.  POSA believed it had become one of the top ten providers worldwide. Its mission included enabling the nation to communicate efficiently, and its values included customer needs, contributing to communities and the environment, meeting the challenges of the country and recognising and rewarding staff contributions.  .

The legislation environment was fully set out. The Electronic Communications Act (ECA) put a huge burden on POSA to effect all that was set out. POSA still needed to look at the Universal Postal Regulations, the Kyoto Convention and the world customs standards and convention.

The Post Office mandate included the support of government projects, by facilitation of access to financial services, improving the capacity of the State to deliver through IT infrastructure and contribution to SADC development and participation in the universal Postal Union activities.

The strategic roadmap was tabled. In 2007 the Post Office would harvest the benefits from newly designed business platforms. In 2008 it intended to develop of past achievements to expand beyond the boundaries of traditional business. In 2007 it aimed to achieve top growth through diversification of non traditional revenue, while continuing the focus on its operational excellence, re-establishing SAPO as a trusted brand and becoming government's preferred partner, while  building a high performance organisation through skilled and motivated staff. . The mail business would include direct marketing and mailing, track and trace, and piloting a hybrid mail system for electronic transfer of data, launch of the truebill unit, implementation of the Telkom delivery services, and transport and hub rationalisation. In the retail unit, the aim was to have one post office for every 10 000 citizens, to overcome the negative image of the post office, to allow access to ICT, and position the retail outlet not necessarily to make profits, but to increase the transactional base. Dedicated financial services counters would be set up. The business process efficiency would be enhanced. Post Bank still maintained the market share for the Mzansi accounts. It aimed to grow the savings book, and increase the VISA unit. It was in discussion with the Mafisa project and the Departments of Housing and Land Affairs. It would be looking at issues around social grants, and would be participating in cash payments. Because Postbank was not an autonomous legal entity it was excluded from membership of the Payments Association of South Africa and the Banking Association, and therefore limited in scope. These challenges would be overcome through corporatisation.  Post bank would be operated as a profit centre, and the plan would be put in place between now and 2010, when it would become a fully fledged savings bank. The logistics unit was developing the marketing strategy, continuous service improvement and product analysis.

POSA would be rationalising its transport network, the front-line network and the infrastructure. A shared services Unit had been put together, which included properties, upgrade of work environment, improving the supply chain, implementing crime and fraud prevention and implementing a sustainable BEE strategy. A transfer pricing model would be implemented from 1 April. Support services covered finance, people, IT, the sales and marketing force. A process was set up to recruit and retain the right skills, and grow them within the post office, and also to set up a holistic employee well-being programme. The training and learning institute had been organised to be able to assist with the SA Post Office and the SADC countries. IT infrastructure was a major focus area. SAPO was aiming at bridging the digital divide, and had set aside R300 million for this. Another important development was in a customer relationship model, which would allow SAPO to tailor make its services. SAPO was working on development of a new brand that would cover the traditional post office, the courier services, financial services and subsidiaries. It was explained how the brand would work. The brand repositioning would not only change the name but would also support a culture change.

Mr Nick Buick, Chief Financial Officer, SAPO set out the financial outlook for 2007. The budget assumed a stable interest rate and slight acceleration in inflation. Oil prices were important as transport was a major part of the business. Salary increases were to run at around 6.8%, so there would be continued pressure on the staff costs. SAPO had been quite conservative in terms of revenue and costs. There had been a tariff increase of 4.1%, which was below inflation, and it would project a volume growth of 4% in the traditional mail business, contrary to the international trends. The retail growth rate was projected at 13%, particularity on the back of pension payouts and other revenue generating activities. It aimed to retain growth in the Post Bank. The next financial year projected R 5.4 billion of revenue. The revenue growth was to be diversified. SAPO would continue to discipline its costs. It was consolidating the transport and staff costs, and all operational costs should not increase by more than 6%. It therefore projected expenses in the next financial year of R4.8 billion. It would invest R755 million in the new financial year, evenly split between IT spending which would improve capacity to deliver, and new properties. Track and trace was to be improved. It would generate around R 540 million from operations. R350 million was expected from National Treasury to fund the universal services obligations and cash surpluses of about R150 million had been brought forward. The operational profit margin projection was 8% for the current year, and 9% in 2007/08. SAPO aimed to be among the top ten post offices in the world and was outperforming other countries in terms of its operating results. The CFG (courier) business, including Speed Services, would turn around to a profit of R50 million. Docex was generating R8 million and projected R10 million.

The detailed income statements were included for the SA Post Office Group.  There was an increase in investments of R4.2 billion, mainly as a result of increasing Post Bank. The total assets were R7 billion.  Operations would generate R378 million in cash for the next financial year. This would fund the capital expenditure and grow the cash assets.

Activities for the 2010 World Cup: Briefing by SAPO
Ms Lefoka reported on the activities planned for the World Cup. SAPO was intending to create national and international awareness stamps, to promote worldwide exchange of information and communication and to increase stamp design as an art form. The first stamps had been launched. It was building awareness with FIFA and the Philatelic Community. It would be launching an international scrapbook competition with a number of other organisations. It would launch a commemorative stamp for 2008, and would put together an African soccer legends book in 2009 in the South African postal union. A stamp design competition would also be launched, that would raise awareness and create excitement about the World Cup. It would finally build the world's largest soccer ball made from stamps from South Africa, aiming for the Guinness Book of Records.

Ms Lefoka reported briefly on the SA Post Office's contribution to  the Accelerated Shared Growth Initiative for South Africa (ASGISA) and the Joint Initiative for Priority Skills in South Africa (JIPSA), tabling the contributions in each cluster. It was also assisting in strengthening postal services in the rest of Africa. It was participating in a number of government programmes, assisting with education and access to finance and IT. She concluded that SAPO intended to continue to navigate a dynamic market environment and communications landscape successfully. It wished to reduce costs and increase productivity, to drive customer satisfaction to new records, continue to focus on core activities, and diversify and continue to use technology.

Discussion
The Chairperson noted that the challenges had not been specified.

Ms Lefoka said that there were challenges and perhaps the presentation had been too short. The major challenge was one of infrastructure at present.
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Adv P Swart (DA) noted that although he seldom went into post offices, he had noticed that the branding had improved the counter services tremendously. He asked for more information on the subsidy. Although SAPO was a business enterprise it received a subsidy from National Treasury (NT). He asked what the subsidy expenses represented, whether the subsidy was properly ring fenced, and called for clarity on the subsidy brought forward. He was not sure if NT would still be willing to pay subsidies if there was not full spending.

Mr Buick responded that the Post Office had formerly received a general subsidy, and NT would fund the shortfall arising from operations. In 2001 this changed to a targeted subsidy. There were 2 areas covered by the subsidy. Firstly it was intended to fund the universal service obligations, such as to deliver mail to rural areas, to grow retail networks, and to open post offices in commercially non-viable areas. The second purpose was to improve efficiency and operational performance to help SAPO to turn around. The subsidy was controlled tightly. Each year a submission was put through and discussed with the Department of Communications, which was the shareholder in SAPO, to set the major service provision and service obligations. There was a monthly report to DOC in terms of spending, the money was kept in a separate bank account, and was ring fenced. He explained that the subsidy brought forward represented funds that had been committed but not yet spent. SAPO would in fact fund projects from its own funds and then draw on the subsidy to refund its own spending. The physical cash flow would often go out in the new financial year.

The Chairperson said there was a fine line between the roll over fund and funds brought forward. He asked if the subsidy had been allocated to specific projects. He suggested that these details could be provided later.

Mr R Pieterse (ANC) noted that the strategic plan included the strengthening of the business platform, and asked for further details were requested.

Ms Lefoka replied that the business plan included network upgrade, where SAPO had done the first phase of consolidation looking at ideal IT networks. The net phase would be to implement. It had looked at banking systems to allow easier use of banking systems. Although it had not started implementing the efficiency processes, the planning was completed, and the implementation would commence in the 2007/08 financial year.

Mr Pieterse noted that some of the questions now posed at this meeting had been asked before. One of the questions that seemed to carry forward related to the availability of telephone number information electronically rather than in printed form.

Ms Lefoka replied that SAPO was the distributor of the Telkom information, which remained with Telkom. SAPO did however have two programmes. The postal codes were available electronically, and in the next few weeks an SMS search for a postal code would be available. SAPO also had a database of addresses that was around 80% complete. A tracking system would be launched so that anyone moving would be able to ask the Post Office to notify customers electronically of their new address. This would also deal with the large percentage of mail being returned to senders.

Mr Pieterse referred to the postal agencies in the rural areas. He complained that these were not resourced properly. They were often located away from other resources like shopping centres or stationers, and often did not have basic resources, such as a fax machine, a copy machine, or stationery available. He noted that this issue had been raised before, but he had still not received proper replies nor had the real services improved. He noted that there seemed to be no uniformity of operations; some closed over lunchtimes, whereas others would stay open after hours and during lunch. Service to the public was paramount, and there needed to be agreements and a check on some of the rural areas.


Ms Lefoka said that postal agencies were a challenge because they had not been standardised in terms of services, contracts and monitoring. In the next financial year SAPO would develop a process and framework on how the services would be contracted out. The plan would also look to how postal agencies could be better capacitated, and would include expansion of black economic empowerment.  SAPO would look at the traffic through the agencies and pilot with some of them. It was also going to strengthen the ability to do payments. It was working on a monitoring plan to try to counteract the differences in conditions and service. 

Mr Pieterse asked if the parliamentary and Robben Island post offices were being utilised effectively.

Ms Lefoka confirmed that SAPO had been trying to relocate the post office on Robben Island to emphasise the significance of the post office was appreciated. Any assistance that could be given by the Committee would be appreciated.

The Chairperson asked that SAPO send through a submission. 

Mr Pieterse queried the supposed toll-free numbers. He thought the number was still an 086 number, which was not toll free, and that no information had been given to the public about the costs of the calls.

Ms Lefoka had the impression that this had been changed to an 0800 number but would check up on it and revert to the Committee.

Mr R Mohlalonga (ANC) and Mr Swart both raised the stability of the Post Office and the pending investigation, noting that these issues would be discussed at a later stage. It was a very important matter and the Committee would need to discuss the reports in a different forum.

The Chairperson noted that the Committee was deliberately not discussing details of what was happening at this meeting, but hoped that the report would be out by May, for discussion with management and the Board. 

Mr Mohlalonga asked what time frames had been set for delivery on universal service obligations and how many post offices had been rolled out.

Ms Lefoka said that deliverables were set and were being monitored by the postal regulator within ICASA. In terms of the retail infrastructure outlets, there were a number of challenges, but 46 new locations had been rolled out. The targets per year had been surpassed in the past three years, with the target for the current financial year having already been met by December.  The costs of universal service obligations were high, especially in the rural areas, as the infrastructure was expensive.

Mr Mohlalonga stated that the presentation had spoken to recruitment and retention of the correct skills. He wondered why it had been necessary to have such large influxes of staff at top management levels and asked if this implied that the previous staff had been bad.

Ms Lefoka indicated that in fact SAPO had a good leadership team. There was continuity and that was essential to ensure that SAPO achieved its aims in future. The programmes mentioned would be looking at critical skills and succession planning at the top level, identifying skills and competencies required. They would also be reviewing retention policies. They would be presented shortly to the Board. The policy would also filter down through the different management levels.

Mr Mohlalonga enquired about the corporate repositioning that had happened when the mandla payments came into the post office. He said that when the previous CEO had come into office in the previous year he had spoken of "the new Post Office". Now this presentation had spoken of “remodelling”. He enquired why it was necessary to keep changing. He added the budget had not spoken to the repositioning and there was no indication of the cost implications.

Ms Lefoka said that her presentation did not look to the "look and feel" but the "brand" of the Post Office. There was no change in what it needed to do and the current steps were drawing and developing on what the previous CEO had done. In terms of the brand positioning, she noted that this was a consolidation of about 16 brands. There was no change in the style of operations apart from that. The cost implications would be assessed in the first quarter of the new financial year, and the costs would become clearer as the matter progressed.

Mr Mohlalonga stated that the issue of medical aid for former retired employees had still not been properly explained to this Committee.

Mr Buick mentioned that this issue was on the balance sheet two to three years ago. Formerly SAPO had subsidised the medical aid contributions of all staff during employment and after retirement. The actuarial liability of this obligation was assessed as R2.6 billion a few years ago, and that was at a time when SAPO was technically insolvent. SAPO had now negotiated with the Unions to remove the medical aid retirement benefit for all active employees, so that the obligation now related only to the current pensioners.  The liability was reduced to R900 million on the balance sheet. This had been ring fenced. In time it would disappear.

Mr Mohlalonga stated that in speaking of the legislative environment, the presenters had not mentioned the monopoly concessions for mail of one kilogram and under. He asked, from a policy perspective, whether there was sufficient basis for this to be maintained and what benefits had arisen from that exclusivity

Ms Lefoka said that the SAPO was aware that the exclusivity would not remain for ever, and this had been taken into account in projections on revenue.  That was one of the reasons why SAPO needed to diversify into other streams. It currently, through the universal postal union regulations, handled the delivery of consolidated mail. It was seeing a decline in this, in line with international trends, but the costs of delivery , including the processing, were high. On the domestic level, local municipalities did not always utilise the post office to distribute statements. So although in theory there was a monopoly, it did not necessarily apply in practice. 

Mr S Nxumalo (ANC) indicated that not enough had been said about the roll out of new offices. In Kwazulu Natal several post offices had been closed down that had served the farm workers, who now had nowhere to go to get their pensions. Specific areas were simply not being serviced. A further problem was that faceless contractors would manage the postal agencies but were not even known to their staff. 

Ms Lefoka conceded that there were challenges in the management of the postal agencies. She was not sure offhand why the post offices had been closed. Subsidies and access to infrastructure had been utilised for postal agencies. SAPO had requested that the Regulator conduct a review of delivery and cost and agree on the areas that needed to be assisted, so they could be monitored.

Mr Ndala Mnisi, Acting Senior General Manager: Retail Services, SAPO added that the initial plan was to identify all offices with contract workers. SAPO was not always happy with the standard of services offered to customers. Where 50% of staff were contractors, they would be replaced with permanent positions.

Mr Nxumalo asked what had happened to the bicycle delivery services.

Mr Janras Kotsi, Group Executive: Mail Business, SAPO said that the modes of delivery had changed in recent years. More postmen had been employed again since 2002.  In Kwazulu Natal the postmen tended to deliver on foot, because the terrain did not favour bicycles, and this also boosted employment. Postmen would be more visible, as they would be getting new uniforms and better facilities.

The Chairperson reiterated that the Committee would be visiting SAPO in May. At that meeting he asked that a more comprehensive indication of the trends be given. He would in particular like details of the comprehensive plan for efficiency and job creation. This should include whether other methods of transport, such as horses, were available and whether postmen were adequately protected. He requested a comprehensive report on the contractors’ position. Security of employment had been a problem for many years. He would like a report on personnel vacancies, and the job creation, including impact of the strategies, including the 2010 strategies. He would like to have details of every office that had been closed.

The Chairperson also called for more information on what had happened last year on the roll out plans, and whether any moneys unexpended had been carried forward. He also wished to have the exact areas of roll out so that the Committee could deal with them in the oversight visits. The Committee had previously seen that sometimes people did not know what the basic obligation of the post office should be.

The Chairperson asked whether there was unhappiness that the municipalities did not use SAPO’s mail services, and whether there was any marketing drive. 

Ms Lefoka replied that SAPO would be preparing full answers for the May visit. She noted that in terms of the municipalities there was a targeted programme. SAPO did not automatically expect that municipalities should use its services, as it recognised that use would follow perception of the services rendered. Use was sitting at around 30%, and more were coming back. One of the main reasons was that SAPO had previously taken a decision to focus on mail box deliveries rather than home deliveries, and the municipalities complained that people did not pay because they did not receive statements. Since SAPO had reverted to street address delivery there was a return of services to the post office. SAPO also made use of inter-government relations to build up relationships with municipalities and inform on services. It was also offering the facility for municipal account payments at the post offices, and this should improve.

The Chairperson said that further details were needed about the actuarial valuations of the medical aid liability and the agreements with the unions. There was the danger that accusations could be levelled that SAPO was only assisting its former employees, who would mostly have been white employees, and penalising its current ones.

The Chairperson also asked SAPO to check the regulations on deliverables as the Committee would want to investigate this in detail in May.
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The Chairperson also asked that a submission on Robben Island, the toll free numbers, and the funds brought forward be sent through in writing.

Mr Kholwane, who had needed to leave the meeting, had indicated that he would be asking for details on the operations of the audit committee, whether it was existing in name or was fully functional, how regularly it met, and what it had discussed.

Ms Lefoka reported briefly that the audit committee had already been requested to provide minutes. It sat quarterly, headed by non-executive Board members. Further details would be provided. 

The Chairperson also indicated that he had noted the databases but would like also to know what areas were still problematic and what strategy had been planned. He would like details of plans for moving forward in any problem areas.

The Chairperson also asked for an explanation of the Public information Terminal (PIT) systems. He had noted that the hardware often had “out of order” signs. He asked if there was a contract with the supplier, when this would expire, how much the machines cost to purchase, and to maintain, and how much they were used, in order to assess whether it was worthwhile to continue with them.

The Chairperson asked that SAPO address the challenges in the converged environment, and detail the opportunities, and the constraints in operating.

Ms Lefoka confirmed that there were some problem areas, but that POSA was looking to the future. It had proposed to the Regulator that new targets be set, as previously mentioned, since the demand study was now some years out of date. She confirmed that the PITs and access to services and portals would be discussed in detail during the May meeting. There was a contract of supply and POSA was looking at ways to make the service more accessible.

Mr Twiggs Xiphu, Group Executive, Corporate Services, POSA added that the converged environment represented a great challenge. POSA could foresee that broadcasting was possible in future, particularly in view of the 2010 challenges. It was making use of outlets and licences. It was also aware of the need for security, and would authenticate data and video. 

Mr Swart said that he would be seeking further detail on the subsidy issues during the May meeting.

Mr Swart said that over the next three years there would be a R1 billion subsidy from NT. Of this only R470 million would be spent, leaving a surplus of R630 million. If he were to add the surpluses over the last two years, this amounted to around R990 million of taxpayers’ money, which had been indicated in the financial statements as “savings”, which was unused money. However, he asked for explanation about the forecasts over the next years. He asked if this was the problem with taking a non-viable enterprise, and trying to build it into a viable enterprise. He believed that what had been created was a hybrid of fulfilling service obligations and attempting to build a commercial postal service. He wondered if the universal service obligations were being ignored in favour of building a commercial enterprise, and enquired if the thinking was that a viable enterprise was the first step, and that it would concentrate on obligations at a later stage. He queried how this tied in with the unused funds. He stated further that at a previous meeting it was mentioned that SAPO was considering looking at a private equity partner. If this happened, he enquired what would happen to the surplus funds, as they clearly could not be moved into a public/private partnership.

In regard to the hybrid nature of the business, Ms Lefoka said that it was true that the POSA needed to become financially viable in order to discharge its universal service obligations properly. Once the current process was complete, it would be fully sustainable and would be able to put greater emphasis on the service obligations, which would grow with time. It was possible that POSA may not need to be funded to the same extent as at present.

In relation to the equity partner, Ms Lefoka clarified that it was only the courier service CFG that was proposed for privatised. This was accounted for separately and was not included in the group, but operated as a subsidiary. A decision would be taken after examining the position. For the moment POSA was concentrating on a turnaround and achieving greater stability.

Mr Buick mentioned that he would prepare a comprehensive report on the subsidies for the May meeting. However, he wished to correct a misperception about the areas of operation. The universal service obligations were assisted with a subsidy that was intended to allow capital expenditure to improve the operations to move these obligations forward. R1.1 billion would be received. However, this was vatable so 14% would be returned as VAT. There were a number of subsidy expenses listed, which amounted to R500 million, and the CAPEX line in the statements showed the costs anticipated. The total costs amounted to around R2.5 billion, and the subsidy to a net R900 million. The balance would have to be paid from the cash generating operations.

The Chairperson asked that the capacity of the POSA to deal with all the challenges should also be addressed in May.

Mr Pieterse said that he would like to see POSA being the preferred provider for social security payouts, but a number of post offices or postal agencies were often closed at times when people were able to attend. Postbank was not always accessible through a postal agency. This service was intended for the poorest of the poor, but did not always reach them. The costs of getting to a post office were often too high, and he recommended that POSA must find ways of taking this service back to the people.

Ms Totsie Memela-Khambula, Managing Director: Postbank said that over the last two years POSA had worked to upgrade the systems. Voucher systems were converted from manual to electronic to make them more accessible. She agreed that at times access to cash could be problematic. The improvements highlighted by the POSA would form part of what was to be included in agreements with agencies. Much had been done, and POSA would be competing on the tender for making the payments. It believed it could improve on its current 5% market share for payments of the social grants.

Mr Pieterse said that the Board activities had impact on the Committee’s oversight functions. Presently the Minister made Board appointments and the Committee had no input, as it did with SABC and ICASA.  He felt that this matter needed to be discussed.

Ms Lefoka said that this would be raised with the shareholder and the Minister. She understood the concerns.

Mr S Nxumalo (ANC) stated that there was nothing specific in the presentation that had addressed POSA’s contribution towards eradicating poverty and fulfilling the priorities in the State of the Nation address.

Ms Lefoka stated that unfortunately she had not had time to deal with the points in greater detail but certain priorities had been outlined in the presentation slides. This was being dealt with as part of the social cluster, and included such issues as work with Landbank, the expanded public works campaign, work on the database to help identify jobs, education, sponsoring of projects and the Umsobomvu campaigns.

The Chairperson noted that this Committee would be holding a special session shortly to discuss various stakeholders’ participation in 2010 and the rollout of services would need to be discussed during this meeting. He asked that copies of all the slides should be sent through to the Committee, as the pack handed out contained only some of the slides displayed.

Mr Nxumalo asked what communications campaigns had been carried out to educate the public about the e-government facilities.

Ms Lefoka stated that not enough marketing had been done yet, but there had been a preliminary campaign together with the Department of Public Services and Administration (DPSA) in launching the e-government services. The Ministers of PSA and Communications were the drivers of the campaign. SABC had had a launch promoting awareness of PITs. Employees skilled in IT were being deployed to help communities. There were plans to work on PITs to accommodate more than one workstation.

The Chairperson indicated that the Committee would like to hear more about the global mail volumes and why South Africa was showing an upturn. He asked about security of mail, what was being done with POSA and an indication of the profile of the criminal cases. He asked for more details of the work being done with Department of Home Affairs (DHA) to enhance DHA’s services. He wished to have more detail on what exactly the diversification away from traditional mail services would mean. He also mentioned that the operating surplus seemed to be stated in round figures, and he would like a more detailed note on that. All of these questions could be addressed during the May meeting.

 The meeting was adjourned.