The biggest union at the SA Post Office (Sapo) has raised concerns about the planned closure of 130 branches by the state-owned entity.

 Aubrey Tshabalala, general secretary of the Communications Workers Union, told SowetanLIVE during an interview yesterday that the planned closures would result in workers losing their jobs in the long term.

He said that communities where the branches would be closing shop are going to be financially affected as they would need to spend money to travel longer distances to access post office services.

Sapo CEO Nomkhitha Mona told the SABC this week that the mailing and banking institution has closed 50 branches so far.

Mona said the company's cash cow business unit was failing to live up to its full potential as the mail was not being sorted and delivered on time, and this impacted negatively on its income. She said the mail revenue has dropped by 50% due to the pandemic, "and that business is never coming back”.

A source at the post office denied that jobs would be lost, saying workers from affected branches would be transferred to other branches.

Tshabalala said Sapo used to receive a government grant until 2007 and its removal was affecting the company's balance sheet.

"Sapo, as opposed to its competitors in the private sector, cannot raise prices of its products willy-nilly. The post office's prices are highly regulated. By removing the government grant, this has resulted in the eventual decay of the post office infrastructure and the information and communications technology has not been upgraded [for years].

"The post office needs a proportional allocation of the government grant. There is also a need to move with speed to deploy a team of experts to come up with strategies on how to save the post office,” he said, adding that it was not sustainable for the company to be surviving on bailouts.

Tshabalala said that post offices in other countries like Japan sustained themselves on the mail, courier and financial services businesses, and he was surprised that the SA government was failing to issue subsidiary  Postbank with a fully fledged commercial banking license.

Such a license would allow Postbank to issue credit products like home loans, vehicle finance and credit cards, to its customers.

Tshabalala said talk about issuing a commercial banking license to Postbank started in 1990s and he was wondering what was the hold up.

"When private individuals apply for a commercial banking license the Reserve Bank issues the license within a few years or months. For instance, it took a few months for the Reserve Bank to issue a banking license to Patrice Motsepe's TymeBank,” he said.

Sapo said it would comment at a later stage.