New law will cause...Layoffs to hit post offices
Published:Wednesday | June 30, 2010 | 12:00 AM
Edmond Campbell, Senior Staff Reporter
NEARLY 1,000 workers could lose their jobs at the Postal Corporation of Jamaica and the Post and Telecommunications Department when proposed legislation is promulgated to establish a statutory body to replace the existing loss-making entities.
Postmaster General Michael Gentles told a meeting of the Public Accounts Com-mittee of Parliament yester-day that a new, leaner organisation would provide jobs for only 1,400 of the current 2,300 persons now employed by the govern-ment body.
"The legislation speaks to a new body, a statutory body, taking over the post office under a new structure, new organisation and new staff to make it that nimble, efficient entity that is going to compete," Gentles told PAC members.
"We have looked at all the categories of workers and we have looked at where we could cut," he added.
Shortfall in funds
Taxpayers have had to be subsidising the Postal Corporation at a cost of $1 billion annually. With increased rates for postal services taking effect in March, revenues have jumped by about 50 per cent.
But, according to Gentles, projected losses for the entity were approximately $500 million. He said capital injection of some $350 million was needed to carry out repairs to offices to acquire equipment.
"Close to 90 per cent of our budget goes toward employees' compensation, so that leaves us with precious little to do anything else."
Insisting that there was an urgent need to revamp the current postal services, the postmaster general described the current operations as archaic, pointing out that it could not compete effectively with other players who provided similar services.
"Ninety-two per cent of our offices and agencies, if we are to look at them from a straight profit basis, revenue versus cost, are in a deficit position," he advised.
Unlicensed companies
The committee was also informed that companies providing courier services in Jamaica were operating illegally.
Gentles said that the Post Office Act of 1941 gave Post Corp sole jurisdiction to operate postal and courier services locally.
Committee member Dr Morais Guy argued that while the Govern-ment failed to introduce new regulatory legislation, other stake-holders were benefiting at the expense of Post Corp.
"My concern is that this legislation has been sitting around for the longest time and we are allowing these companies to compete with a legal entity. And there is no way that that particular legal entity can license these entities that are competing it so that it can get additional income," Guy said.