Officials from a range of express parcel companies have congregated in Polokwane to participate in the first road show meetings being held on the new postal regulations.
Many are concerned about the effect of the new rules on their businesses and the industry as a whole. 'If the regulations are implemented as they stand, it will lead to many small companies going out of business and only the large entities are likely to survive,' says one industry official. The draft regulations were first gazetted late last year, but due to a series of changes within the postal regulator, not least of which was the exit of its head Warara Kakaza, the road show is only starting.
Mikie Kutta, acting chief director of the Postal Regulator, says the aim of the workshops, being held around the country this week, is to get input from as many stakeholders as possible. 'We want to ensure we have buying from everybody,' she says. The main aim of the rules appears to be getting a handle on which and how many companies are operating in the market, while ensuring that the SA Post Office's monopoly over postal items of less than 1 kg is protected.
The legislation will prohibit courier companies from operating a postal service without a licence and provides for the regulator to impose fees and carry out inspections. Applications for a licence and registration will cost R15000 and R10000 respectively, plus a further R550000 a year for three years payable in advance. After three years, the registration fee will amount to 2% of turnover.
In addition, the draft rules reinforce the cap on annual postal tariff increases, which cannot rise by more than the consumer price index or 12%, whichever is the lowest. Kutta says the SA Post Office has been given a range of universal service obligations, in return for which it must be allowed to operate exclusively in one segment of the market. These include delivering 500000 new addresses each year and operating often unprofitable post offices and postal agencies in outlying areas.
The SA Post Office provides an essential service to millions of South Africans, she says, particularly for people in deep rural areas whose only connection with the outside world is often the small postal outlet in their area. Kutta says private companies would not deliver such services as there is limited, if any, profit motive to do so. As such, the SA Post Office's monopoly must be protected. Apart from having a limited monopoly, the SA Post Office is also subsidised to the tune of about R500 m a year. The subsidy, which Finance Trevor Manuel announced last year, is for three years, and will support its restructuring which is aimed at returning it to self-sufficiency.
