Post office management works to cut losses

  • 2009-10-28
  • From wire reports
RIGA - Disarray continues at state-run postal company Latvijas Pasts as management has not yet been able to come up with any specific solutions for getting it out of its financial troubles, reports news agency LETA. Transport Ministry State Secretary Nils Freivalds says that management has been inconsistent in its decisions, therefore no conclusions on a new business model have been made, despite what seemed to be progress earlier this month.

The board on Oct. 16 approved a new development strategy for the company, while rejecting Riga Deputy Mayor Ainars Slesers' idea, when he was Transport Minister, of establishing a Postal Bank as part of the strategy. The new plan calls for the company to partly preserve its current customer service functions, and for Latvijas Pasts' operations to be improved significantly.

The company's current services under the plan will be further developed and new services will be introduced. In order to provide postal services in rural areas, part of the company's functions will be out-sourced to department stores, petrol stations, libraries, and state or municipal institutions.
This alternative development strategy was drawn up because the activities that were laid out in a cooperation agreement with strategic partner Mono, under the Postal Bank idea, never materialized.
"Taking into account that the Postal Bank project is far behind schedule and the financial situation of the post office has worsened due to the economic crisis, any further delays pose a threat to operations," says company representative Agija Terauda.

The company denies that it will have to pay an 1 million lats (1.4 million euros) penalty if it refuses to support the Postal Bank project, because the cooperation agreement stipulates that any of the parties may unilaterally terminate the agreement before the term.
Slesers (Latvia's First Party/Latvia's Way) believes that the project has been halted because of "political jealousy," says his press secretary Girts Dripe. "Slesers concludes that, regrettably, his initiative and his plan, which would prevent many post offices in Latvia from being shut down, and help many residents, will not be fulfilled," gripes Dripe.

The Transport Ministry, which is responsible for Latvijas Pasts, appointed a new board that includes Transport Ministry officials. Head of the Transport Ministry's Internal Audit and Quality Management Department Aivars Veiss will now be chairman of the board, with head of the Transport Ministry's Investment Department Ilze Aleksandrovica, and Riga International Airport board member Toms Naburgs joining the board.