Home »Business and Economy » Pakistan » FY2018-19: Pakistan Post’s deficit projected to cross Rs 12 billion
Amid deteriorating postal services owing to lack of innovation to compete with private couriers and electronic alternatives, Pakistan Post's deficit is projected to cross Rs 12 billion by the end of current fiscal year 2018-19.

Official sources revealed to Business Recorder that the government has set a revenue target of around Rs 15 billion for Pakistan Postal department for 2018-19 after it missed revenue target of Rs 13 billion for 2017-18. However, the expenditure of the department is likely to cross Rs 25 billion compared to Rs 22.24 billion in 2017-18.

Pakistan Post has suffered cumulative losses of over Rs 40 billion from 2013-14 to 2017-18 with consistent widening of the revenue and expenditure gap. Sources said that the department used to be a profit-making entity till 2009-10 when two decisions made by the government put it into losses.

First, the department was enabled to open accounts for National Savings Centres and in return got Rs 1.5 percent commission for its services. But in 2010, the Ministry of Finance decreased the service charge to Rs 0.5 percent which cut its revenue by around Rs 2.5 billion annually.

The Ministry of Postal Services has taken up the matter with finance division a number of times but without any positive outcome. National Assembly and Senate standing committees had also been involved but the matter is yet to be resolved. The department is considering raising the issue at higher level, sources added.

Second, around 80 percent of the budget goes to pays and pensions which implies only 20 percent for operating expenses, physical assets, civil works and for repair and maintenance.

An official told this correspondent that the department is facing loss since financial year 2009-10 due to several factors including: (i) increasing allocation on expenditure on account of pay, allowance and pension of the employees due to annual increase; (ii) price hike in the rate of utilities, commodities and services; (iii) decrease in the rate of post office commission from Rs 1.50% to Rs 0.50% on Saving Bank Schemes by the finance division, (iv) non-increase in inland postal tariff since a long time; and (v) parallel organizations also run the affairs, like TCS, OCS, Leopard and others.

The department has taken several steps to improve its performance and reduce the deficit the department is currently facing. Pakistan Post has approached Turkish Airlines, Emirates and Lufthansa to start business with them to improve network coverage and quality of service as well as to effectively compete with private couriers. Currently Pakistan Post utilizes the services of PIA, Etihad and Saudi airlines.

To meet the revenue and expenditure gap several steps have been taken by the department. A major portion of expenditure is incurred on payment of pensions to retired employees of the department. If this expenditure is taken away from the budget of the department and charged instead to the budget of the federal government as in the case of other federal civil organization the department's expenditure allocations would change in favour of development oriented services, the official stated adding that the case has been taken up with the finance division.

Electronic money order door step service has commenced. Electronic Money Order (EMO) Service is the swiftest way to transfer money froom one post office to another Pakistan Post has started new service i.e. same day delivery in different cities i.e Rawalpindi, Lahore, Multan, Peshawar, Karachi, and Islamabad for delivery of mail articles on the day of booking.

For improving the transmission and delivery of mail in remote areas, new district mail offices have opened in Narowal, Chiniot and Bhakkar. To facilitate the sorting and delivery of mail, an updated version of the Post Code Directory has been compiled, printed and circulated to all operational offices in 2018. Express Mail Track and Trace System previously available at 24 locations in 14 stations have now been extended to all 83 general post offices and 53 district mail offices of the country.

Copyright Business Recorder, 2019

the author