New state postal service gears up for competition

New company aims at making profits by adding advanced new services and becoming more efficient.

By
February 28, 2006 08:05
2 minute read.

 
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Israel will on Wednesday have a new state postal company, replacing the Postal Authority and required to face competition from the private sector. Called Doar Yisrael in Hebrew, the new company aims at making profits by adding advanced new services and becoming more efficient while continuing to provide mail services to the whole population. The decision to establish a for-profit government postal company was made by the government in September 2003, but there were delays due to concerns by the Postal Authority's staffers about their rights and jobs. Israel Postal Company chairman Ya'acov Edri said: "Becoming a state company will have its advantages, as during the last few years the authority accumulated heavy debts that could have led to financial collapse. We have now turned from a collapsing postal service to a coping one." Company director-general Avi Hochman, who like Edri was transferred the identical job from the authority to the new entity, said that it would "continue to lead the postal market, serving as an ambassador to every sender and receiver in Israel, and from Israel to the rest of the world, on the basis of profit-making financial principles and at a high level of service." The new company has retained the authority's 700 branches around the country. To the existing 100 services, from sale of stamps to foreign currency exchange, the company will add sales of airline, theater and movie tickets, Mifal Hapayis, communications and office equipment, pre-flight services that include baggage transport and security checks, logistical services and bonded warehouses. Hochman says the company remains committed and bound to providing universal mail services, but that it can become profitable only if there is proper supervision to ensure fair competition with the private market. Israel Postal Company employees will work five days a week instead of six, but most branches will be open six days a week. During the first three years, manpower will be reduced by 450 workers, or about 10 percent of the current staff. The Knesset Finance Committee recently approved a hike in stamp rates of seven agorot per stamp in addition to a levy of VAT at 12 percent. The Postal Authority had not been allowed by the government to raise rates for several years, which forced it to become more efficient but also made it swim in red ink. The company's new Web site is at www.israelpost.co.il instead of the previous www.postil.com. Union head Reuven Karazi expressed his satisfaction over arrangements that "ensure the financial security of the company and the rights of employees and solve the pension issue" for those who will have to leave. The Postal Bank becomes a subsidiary of the Postal Company and is expected to serve as a major engine for the company's financial growth. Its annual turnover is NIS 180 billion, and it will be allowed to offer more services than ever, including deposits and the sale of stocks and bonds.

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