The finance committee will discuss the privatization of the post office for the third time tomorrow (Tuesday). If a vote is held, the privatization plan may be finally approved. The two previous discussions did not deal with the reading of the text of the privatization outline and the state’s interest orders in the Post Bank and the Israel Post Company, but dealt with the postal situation in general and the consequences of privatization.
In the previous discussion, the representatives of the post office and the workers’ committee expressed their displeasure at not holding a vote, which rejected the privatization. The continuation of the wait, according to them, endangers the whole process and may entail heavy expenses in the future from the state, in favor of funding the post office. The members of the finance committee rejected the audit, on the grounds that the Companies Authority only applied to the committee for approval in March.
The privatization of the post office is unusual compared to previous privatizations, such as Bezeq, the refineries or the port of Haifa because it is not a business entity with a horizon and a valid business model, but a company that is run from one recovery plan to the next. Postal activity in Israel is rapidly declining and with it the demand for Israel Post’s core service.
The company hopes that under private hands it will be possible to find a new business model, which will allow savings in expenses as well as investments. For example, the Rami Levy Group and the Delek Company may combine the layout of the postal units, under the existing real estate of the companies’ retail activities. The Malgam Schlissel Group already has an activity in the collection field, which partially overlaps with the postal activity.
The other interested groups have already withdrawn or are inclined to do so. In any case, the postal company is faced with heavy expenses in the coming years on salary agreements and retirement compensation for employees who will leave and the termination of the benefit of using real estate without payment, in assets that have already been sold to the state. From the point of view of the treasury, the success of privatization is not measured by the improvement of service to the public, but by the fact that the state treasury will not finance These expenses, as it did in the previous decade.
With or without privatization, the Minister of Communications already last year signed a new license for the company, which includes extensive concessions and allows for a significant reduction in the layout of postal units and also improves the level of service to the public. Even considering the facilitations, operating the post office is a difficult business challenge, requiring large investments in significant efficiency in the level of technology and mechanization of the company. Privatization, in this context, is a search for an additional source of funding, when the Treasury is no longer interested in serving in this role.
The deployment of the frontal postal services, as required by the state, is currently decidedly uneconomical in some regions of the country, and this without providing the post office with an alternative source of funding. The public will pay the price, through service damage and price increases. As far as the state is concerned, once the privatization is completed, it will already be someone else’s problem.
