Postal Authority delivers more, earns less

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Headline: Postal Authority delivers more, earns lessByline: JUDY SIEGELEdition; DailySection: EconomicsPage: 09

Wednesday, October 9, 2002 -- Despite e-mail, faxes, Internet and chat groups, the volume of mail handled by the Postal Authority is up - but its profits are down. The authority's deficit reached NIS 70 million during the first half of this year, largely because of a reduction in the use of its messengers and other profitable services.

Authority chairman and acting director-general Yossi Shelli said he viewed the authority's financial situation as "very serious," and ordered efficiency measures to be taken immediately and for the long term. The measures include a reduction of manpower and the dismissal of hundreds of workers - 130 this year and 250 more in the next two years. Unprofitable postal branches will be closed down around the country. Credit to large customers will be reduced to a minimum, while the authority's delays in payments to suppliers will be extended as much as possible.

Shelli demanded that the cost of a regular stamp, now NIS 1.20 and unchanged since 1999, be raised by at least 15 percent. The government must realize that stamps are the "bread and butter" of the authority that are its main income for paying the salaries of its 7,000 employees, he said.

Israeli postal rates are the cheapest in the Western world, Shelli asserted. In the US, the comparable cost for a regular letter is NIS 1.50, in Switzerland NIS 2.39, NIS 1.73 in England, and NIS 2.21 in Germany.

Shelli called on the finance and communications ministers to immediately intervene to help the authority reduce its accumulative deficit. The authority wants to turn into a government company with more flexibility to react to changes and developments in the mail sector. He also requested that the authority be freed from having to pay annual royalties of NIS 50 million to the Treasury for the capital it received when it left the Communications Ministry to become a statutory authority.

Although less profitable, the authority dispatched 664 million pieces of mail last year, compared to 635 million in 2000. During the last decade, there has been an 82% increase in the pieces of mail sent domestically and abroad, even though the Israeli population has grown during this period by 30%.

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