Future of Czech postal service unclear as ministers clash

29-09-2014

The future of Česká pošta (Czech Post) is unclear as key ministers in the centre-left coalition government have differing views as to what to do with the country’s state-owned mail service, Hospodářské noviny reported on Monday.

Photo: Tomáš AdamecPhoto: Tomáš Adamec Česká pošta has 32,000 employees and an annual turnover of over CZK 20 billion. It has over 3,200 branches in municipalities around the country and administers strategic government IT systems.

The postal service comes under the office of the minister of the interior, Milan Chovanec, who wants to halt plans set in train by a previous centre-right government to turn it into a joint stock company ahead of privatisation.

Indeed, Mr. Chovanec told Hospodářské noviny his party the Social Democrats, who lead the government, will not countenance a sell-off.

He says Česká pošta cannot unload unnecessary property due to the already launched transformation process. Though the company is in the black – profits last year reached CZK 220 million – its revenues have been falling and, as with other state employees, its staff are set for a pay rise.

Mr. Chovanec therefore wishes to subsidise Česká pošta to the tune of around CZK 700 million a year. His ministry is planning an amendment to the postal law under which some of its services would become public services and it would receive state funding to keep branches open.

However, these plans have run into opposition from the minister of finance, Andrej Babiš, whose ANO party have six cabinet seats to the Social Democrats’ eight.

Mr. Babiš told Hospodářské noviny that Česká pošta should produce a long-term strategy under which it would not require state funding and would not close branches while still making a profit. He says the postal service has traditionally been non-transparent in its dealings.

The issue of closures is a thorny one. When the then director of Česká pošta raised the idea of shutting branches in 2008 he was swiftly fired by a predecessor of Mr. Chovanec’s. The latter says today that no post offices will be closed without the say-so of regional and municipal authorities. Behind the scenes another point of division is influence over the companies that administer key computer systems for the Czech state, including an electronic messaging system used by all government authorities known as Data Box.

Mr. Chovanec and Mr. Babiš have in recent months butted heads over which of their two ministries the awarding of large state IT contracts should fall under.

Alongside Česká pošta, the Czech securities printing and minting agency also oversees important databases – and it is controlled by Mr. Babiš’s people.

If the postal service was to become a joint stock company the Ministry of Finance would immediately gain influence over it, as in most cases it is the branch of government that oversees the state’s rights in companies. This could happen without a privatisation ever having to take place, Hospodářské noviny reports.

Česká pošta lost its monopoly position with regard to letters up to 50 grammes in 2013 (it had already lost it for parcels). Meanwhile, its contract with the ČSOB, under which the bank operates branches of its Poštovní spořitelna savings society at post offices, expires in 2017.

29-09-2014