Pakistan Post Office deficit increased to Rs 6.5 billion per annum, Director General Fakir Syed Shaharyaruddin revealed this while briefing a parliamentary panel here on Friday. However, the department has submitted a reform agenda to the Prime Minister for approval, which if implemented will earn additional revenue of Rs 5 billion within two years.
The DG stated this while briefing the Senate Standing Committee on Communication which met with Daud Khan Achakzai in the chair. Pakistan Post made a presentation to the Prime Minister on December 29, 2015, and earlier same presentation was made to Secretary Finance on December 22, 2015.
Pakistan Post is planning to launch Mobile Money Transfer on Public Private Partnership (PPP) model. He further said that three ways have been proposed to the PM for ousting the organisation of crisis which includes privatisation, corporation and liberalisation. However, the committee strongly opposed the privatisation and recommended reforms to overcome the ongoing crisis of the organisation.
DG said that as part of the reforms agenda, the mobile money solution, Pakistan Post would require 3200 post offices, 9000 agents/EDBOs, hardware, software for this solution, training of postal human resource advertisement of this new product (brand recognition) and connectivity. Pakistan Post can earn additional revenue of Rs 5 billion within two years of launch by undercutting the market (assumption: 20 percent of present market share).
He said that partners are available in the market to launch this product, which is also ready to provide end to end solution, adding that they are prepared to equip, run and maintain the solution and will maintain current market standards. For reimbursement of their investment, partners are looking for revenue sharing model, he added.
Private partner will help Pakistan Post to re-brand money remittance services and launch mobile money solution by providing hardware, software, training and advertisement. A letter has been written to Prime Minister, seeking his permission to launch this solution on Public Private Partnership on revenue sharing basis.
According to the Reform Agenda-2, Pakistan Post would launch Logistic Company (a wholly owned subsidiary company). He said that domestic courier market is around Rs 30 billion, e-commerce market is around Rs 2-3 billion, which is expected to reach Rs 60 billion in 2017 and Pakistan Post's share in courier market is Rs 450 million. A logistics company is to be established with an investment of Rs 800 million (approx) in the areas include, GPS enabled trucking fleet, ware houses, distribution channels (upgrade post offices, HR training) and information technology (data centre, backend systems, retail management etc) brand recognition.
Pakistan Post expects to double its revenue to Rs 900 million in 2 financial years with progressive annual increase of 15 percent market share in three succeeding years. Pakistan Post will establish an autonomous logistics company (100 percent self-owned) under Companies Ordinance, 1984, said DG, adding that the company will enter into partnership/JV with the private sector to bring investment. The revenue earned by the company is to be shared by Pakistan Post and the private partners.
The PM has been requested to approve strategy-II allowing Pakistan Post to launch a logistics company. Expression of Interest will be invited for the three projects through publication on PPRA website and national newspapers and for Mobile Money Transfer assistance of IPDF will be sought. The whole process will be carried out in a transparent manner.
He further said that negotiations with Benazir Income Support Programme (BISP) are underway regarding business under new system and arrangement. Further negotiations are in progress for signing an agreement with Money Gram, said DG, adding that MOU has also been signed with the Bank of Punjab for providing cash management facilities and other allied services beneficial to both the institutions. The committee expressed annoyance over delay in recruitment on 171 posts under the Aghaz-e-Haqooq-e-Balochistan package. Communication Ministry informed that agreement is going to be signed with Balochistan Testing Agency and the process is likely to be completed soon.