KLAIPEDA - Yesterday you went to the postoffice to mail a letter; tomorrowyou may be going thereto open a bank account or withdrawmoney. All this could be availablein the establishment commonlyknown as the Lithuania Post Bank.However, you won't be doing thesethings just yet. Open bidding to buyLithuanian Post Bank has to be putoff for one reason - no one is interestedin investing in the highly indebtedcompany. Lithuanian Posthas put on hold the internationalcompetition which was meant tofind a foreign financial institutionto run Post Bank.
"The results of the internationalcompetition are not the ones weexpected. We had only a very fewcontestants, to be exact, four, nonefrom abroad, so we had to annul it.The other thing is that the Post'scurrent financial situation is morecomplicated than it was when weannounced the competition. Insuch a grim situation, LithuaniaPost would not be able to meet its financialcommitments. We will discusswith the Post's board what todo next. If we decide to pursue theidea of a Post Bank, we may go for itwithout a private partner," EligijusMasiulis, minister of the Ministryof Transport and Communications,said after a meeting with PresidentDalia Grybauskaite last week.Thus, the National Post, overthe last two years, remains the onlystate-run enterprise with a long losingstretch delivering a yearly lossaveraging a bit over 20 million litas(5.8 million euros). However, theminister is convinced that with itsgood infrastructure, rendering financialservices could be a way toensure additional income from thePost.
Such a disappointing announcementis quite a setback for liberalMasiulis, who just less than oneyear ago was sparkling with optimismwith the plan to turn the indebtedPost into an effectively runfinancial institution. "With thePost we have a good possibility toestablish a different enterprise thatwould operate as a credit establishment.A bank, selected in a competition,will soon become LithuaniaPost's shareholders," Masiulis toldthe monthly journal Versus lastMay.The already existing Post financialinstitutions, delivering somefinancial services since 2007, couldshape up a would-be Lithuania PostBank. Currently, the Post renderssome intermediate financial servicesas well as, in collaboration withLithuanian Insurance, some insuranceservices. What sounds quitenew for Lithuania Post - a nationalPost Bank � has been standard inWestern countries. For example, inGermany, the Post lends out credits,renders insurance services andcredit cards.Masiulis is eager to transformthe lowly Post into a successfulinstitution, envisioning theindebted Post offering extendedservices. He had earlier contemplatedthe possibility of the Postoffering IT services. One of hisproposals was the creation of anelectronic distribution system ofstate documents, along with theCenter of Registers. The youngminister hoped it would not bea complicated matter, since theCenter possesses personal and enterprisedata, and the Post has theaddresses, however, the objectivehas not been reached yet.The minister eyes the Post'sprivatization as the only way tomake it work profitably. "WhenLithuania Post becomes more competitive,starts to work profitably,then I will see no hindrances for privatecapital to come in. Being runby private capital, the Post will begoverned more effectively," Masiulistold The Baltic Times. His predecessor,Algirdas Butkevicius, shookoff the idea of privatization.Despite the setbacks, the Ministryof Transport and Communicationsis trying to tackle the Post�sfinancial losses. Last week it hostedthe meeting of the Post's board, duringwhich CEO Andrius Urbonas introducedmeasures allowing for thereduction in the planned loss, andan increase in the salaries of thepostmen, of up to 10 percent. "TheBoard in today's meeting approvedthe action plan aimed at stabilizationof the company's financialsituation and modernization of itsactivities," said Urbonas."One of the core measures isthe implementation of the company'snew management structurewhich includes centralizing a majorityof the similar administrativefunctions and reducing the numberof positions which are not directlyrelated to the postal activities," theCEO said. According to Urbonas,staff costs make up about 70 percentof all costs, and the administrativechain throughout the whole of Lithuaniastill has its own resources.Urbonas stressed that thesereforms will not touch the mostvulnerable group of employees,the postmen. On the contrary, fromJuly 1, 2010, the increase in salaries,of up to 10 percent, is expectedfor the personnel of the productionline. He says that, while reformingthe structure of the companyand striving for more efficient operations,it is necessary to reducethe number of employees by 13percent, most of which will be inadministrative personnel. It hasbeen calculated that the mentionedchanges in personnel will providean annual savings of about 16.5million litas.
"The global economic weakness,reduced purchasing power ofcustomers and a complicated situationin the company is forcing usto make non-popular but necessarydecisions," said Urbonas.After implementation of theforecast measures, Lithuania Postcould finish 2010 with a 17 millionlitas loss. "After revision of thecontracts with current providersof IT, money collection, cleaning,security and other services, wemanaged to save 4 million litasin annual expenditure," boastedUrbonas.
One of the additional cost-savingsideas is, from Feb. 1, organizationof operations in most ruralpost offices will be changed. Theywill now open only five workingdays a week. "Considering the reducedneed for postal services in ruralareas, we decided to reorganizethe work of post offices on Mondaysand Saturdays; this will allow for2.5 million litas in yearly savings,"says the director general.Thus, from Feb. 1, mail deliveryto rural areas will take placefive days a week, from Tuesdaysthrough Saturdays. Delivery in urbanareas will not change; letters,parcels, newspapers, journals willbe delivered six days a week, fromMondays through Saturdays. Therewill be 129 urban post offices.There will also be planned thepossibility to give to the administrativeemployees from one to fourdays of unpaid leave per month.This would allow for the savings ofup to 5 million litas. Other ideas includethe optimization of logistics,routes, etc.Without making any changes inthe organization, the possible lossin 2010 could be more than 50 millionlitas.
Lithuania Post now has 7,627employees. The postal network embraces736 stationary post officesand 28 mobile ones. Following theorder of the director general, closingthe post offices, planned byprevious management, was discontinued.The suggestion by the tradeunions regarding the minimumlength of the work day in the ruralpost offices was accepted, whichwas that rural post offices will workat least two hours a day.
