Senate urges Interior Ministry to save Czech Post from insolvency

by   CIJ News iDesk III
2023-01-12   04:32

The Czech Interior Ministry, as the founder of the Czech Post, should prevent the company from being financially threatened by a loss of revenue due to the mandatory introduction of data boxes, according to the Senate. It should thus ensure the provision of basic postal services in particular. The Senate today asked the ministry to do so at the behest of its Rural Development Committee. It expects information on the measures taken by mid-March this year. Interior Minister Vít Rakušan (STAN) appreciated the Senate's interest in the Czech Post and welcomed the recommendation.

"If nothing is done, the (Czech) Post may end up in insolvency," the minister admitted. "Czech Post needs transformation," he said. He said the post office must also apply itself in the digital world, given that 17 percent of the Czech population is not computer literate. According to the Austrian, government officials agreed on Tuesday that the government would take the relevant basic steps within two months.

Commission chairman Jiří Vosecký (SLK) said the post office would run into financial problems because of the introduction of mandatory data boxes. As a result of the abolition of sending registered letters between authorities and tradesmen, the Czech Post will lose CZK 2 billion in revenue, said STAN senator Petr Štěpánek. According to him, the post office could find itself in bankruptcy as early as the middle of this year.

The minister said that it was necessary to adopt a sustainable financing model for the post office this year to prevent its losses from reaching CZK 4 billion. The Austrian said the post office has been underfunded for a long time. Senator Daniela Kovářová (independent) described this as a term from socialist economics. She recommended the privatisation of the Czech Post, which Štepánek objected to by pointing out that it is not possible to entrust the payment of pensions to a private company.

The Czech Post is a state-owned enterprise and has been operating in the red in recent years. Last year it halved its loss to CZK 681 million. In the previous year it posted a loss of CZK 1.37 billion. Operating income rose by CZK 400 million to CZK 19.55 billion. Last year's performance was affected by the coronavirus epidemic.

According to the decision of the Czech Telecommunications Office, the state will reimburse Czech Post for the net costs of providing basic services last year in the amount of CZK 750 million. The Post Office will thus receive CZK 1.5 billion for last year, the maximum possible amount. It has already received half of it in August. Last year, the post office claimed CZK 1.85 billion, of which almost CZK 1.47 billion was for the branch network and the rest for the delivery network and support processes.

The reimbursement of net costs for the last four years was approved by the European Commission in the summer. The company subsequently received CZK 4.5 billion from the state for 2018 to 2020 and three quarters of a billion for last year. The post office used the repayments to repay commercial loans it had to arrange with banks due to delays in the European Commission's investigation. Some of the money went to improve working conditions for employees.

The post office operates some 3 200 branches in the country and provides basic postal services throughout the country on the basis of a licence from the Czech Telecommunications Office. The net cost of providing these services is covered by the state under the law.

Source: CTK