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August 19, 2019 3:02 pm | FILED UNDER: business

Babis Calls For Massive Overhaul Of Postal Service

By Petr Dubinsky Czech Postal Service Ceska Posta worker transporting mail

Czech Post needs restructuring, according to Prime Minister Andrej Babis in a post on Facebook. He noted plans to sell unused real estate held by the Czech Post. According to Babis, the money earned from the sales will go towards updating their technology.

 

“The old Czech Post is dead,” Babis said. “The only solution is restructuring, which will make it a modern, competitive postal service,” said Babis. He expects the sale of unnecessary real estate and the purchase of new technologies.

 

Czech Post suffered a billion-dollar loss last year. The current management prepared a restructuring plan that they forecast by 2021 will return a profit in the tens of millions of crowns. Babis says their idea is unrealistic. “In this situation, it is extremely irresponsible to deceive the public, politicians, and especially workers with unrealistic promises. A positive economic outcome in 2021 is just a wish and a dream.”

 

According to Babis, the company needs to hire quality managers. ”To my knowledge, such a strategy has not yet been approved, Babis said. According to him, the mail must remain state-owned. “It would be best to create a holding company as a joint-stock company to make the activities of Czech Post transparent,” he said.

 

President Milos Zeman signed into law a bill to increase the total compensation the state provides Czech Post. The new cap is now 1.5 billion crowns an increase of one billion crowns over the previous limit of half a billion. An increase in the upper limit of compensation was proposed in the Chamber of Deputies by Jan Hamacek because the current limit does not allow for full reimbursement of costs.

 

Between 2018 and 2022, expenses are estimated to rise to three billion crowns per year. According to Hamáček, the increase is due to a decline in the mail, and overhead to operate 3200 branches. He wants to use the money to raise the payroll of the employees.

 

The post office will also receive CZK 800 million from the state to cover losses it incurred in 2013 and 2014. Of this total amount, the post office will receive 500 million in 2019 and the remaining 300 million in 2020.

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