Israel Postal Company Blames Losses on Need to Deliver Mail

YERUSHALAYIM -

The Israel Postal Company has presented a novel explanation for its massive financial losses over recent years: “The need to operate branches and to deliver mail throughout the country,” according to a report by Globes on Monday.

The IPC claims that were it not for expenditure on such unprofitable services, which led to losses of 100 million shekels a year, the company would have earned a net profit of 45 million shekels in the first half of 2021.

That argument notwithstanding, proposals for privatization of the chronically inefficient and unprofitable postal service, are proceeding.

Minister of Finance Avigdor Liberman is reportedly demanding that a decision be made soon on the different options for privatization. The options range from a complete one-time sell-off to a partial deal.

Several months ago Minister of Communications Yoaz Hendel recommended selling 100% of the IPA, which has some support.

But the leading option currently under consideration at the Finance Ministry is a public offering for 40% of the company. The money raised would be channeled into a reform plan that would not involve state infusions of cash.

Legal complications could prevent such a solution, as it would abrogate a prior government privatization plan already set in motion in 2018.

Several companies have already submitted bids to buy a 20% stake in the company, and changing the government decision would also raise objections from the workers committee, which signed an agreement on the initial plan.

Israel Postal Company’s financial outlook is not brilliant: revenue was NIS 827 million in the first half of 2021, up 11% from the corresponding period of 2020, while there was a net loss of NIS 64 million, narrowing by nearly NIS 100 million from the first half of 2020, Globes said.

What the fate of unprofitable mail delivery would be under privatization was not mentioned in the report.