KLAIPEDA - Yesterday you went to the post
office to mail a letter; tomorrow
you may be going there
to open a bank account or withdraw
money. All this could be available
in the establishment commonly
known as the Lithuania Post Bank.
However, you won't be doing these
things just yet. Open bidding to buy
Lithuanian Post Bank has to be put
off for one reason - no one is interested
in investing in the highly indebted
company. Lithuanian Post
has put on hold the international
competition which was meant to
find a foreign financial institution
to run Post Bank.
"The results of the international
competition are not the ones we
expected. We had only a very few
contestants, to be exact, four, none
from abroad, so we had to annul it.
The other thing is that the Post's
current financial situation is more
complicated than it was when we
announced the competition. In
such a grim situation, Lithuania
Post would not be able to meet its financial
commitments. We will discuss
with the Post's board what to
do next. If we decide to pursue the
idea of a Post Bank, we may go for it
without a private partner," Eligijus
Masiulis, minister of the Ministry
of Transport and Communications,
said after a meeting with President
Dalia Grybauskaite last week.
Thus, the National Post, over
the last two years, remains the only
state-run enterprise with a long losing
stretch delivering a yearly loss
averaging a bit over 20 million litas
(5.8 million euros). However, the
minister is convinced that with its
good infrastructure, rendering financial
services could be a way to
ensure additional income from the
Post.
Such a disappointing announcement
is quite a setback for liberal
Masiulis, who just less than one
year ago was sparkling with optimism
with the plan to turn the indebted
Post into an effectively run
financial institution. "With the
Post we have a good possibility to
establish a different enterprise that
would operate as a credit establishment.
A bank, selected in a competition,
will soon become Lithuania
Post's shareholders," Masiulis told
the monthly journal Versus last
May.
The already existing Post financial
institutions, delivering some
financial services since 2007, could
shape up a would-be Lithuania Post
Bank. Currently, the Post renders
some intermediate financial services
as well as, in collaboration with
Lithuanian Insurance, some insurance
services. What sounds quite
new for Lithuania Post - a national
Post Bank � has been standard in
Western countries. For example, in
Germany, the Post lends out credits,
renders insurance services and
credit cards.
Masiulis is eager to transform
the lowly Post into a successful
institution, envisioning the
indebted Post offering extended
services. He had earlier contemplated
the possibility of the Post
offering IT services. One of his
proposals was the creation of an
electronic distribution system of
state documents, along with the
Center of Registers. The young
minister hoped it would not be
a complicated matter, since the
Center possesses personal and enterprise
data, and the Post has the
addresses, however, the objective
has not been reached yet.
The minister eyes the Post's
privatization as the only way to
make it work profitably. "When
Lithuania Post becomes more competitive,
starts to work profitably,
then I will see no hindrances for private
capital to come in. Being run
by private capital, the Post will be
governed more effectively," Masiulis
told The Baltic Times. His predecessor,
Algirdas Butkevicius, shook
off the idea of privatization.
Despite the setbacks, the Ministry
of Transport and Communications
is trying to tackle the Post�s
financial losses. Last week it hosted
the meeting of the Post's board, during
which CEO Andrius Urbonas introduced
measures allowing for the
reduction in the planned loss, and
an increase in the salaries of the
postmen, of up to 10 percent. "The
Board in today's meeting approved
the action plan aimed at stabilization
of the company's financial
situation and modernization of its
activities," said Urbonas.
"One of the core measures is
the implementation of the company's
new management structure
which includes centralizing a majority
of the similar administrative
functions and reducing the number
of positions which are not directly
related to the postal activities," the
CEO said. According to Urbonas,
staff costs make up about 70 percent
of all costs, and the administrative
chain throughout the whole of Lithuania
still has its own resources.
Urbonas stressed that these
reforms will not touch the most
vulnerable group of employees,
the postmen. On the contrary, from
July 1, 2010, the increase in salaries,
of up to 10 percent, is expected
for the personnel of the production
line. He says that, while reforming
the structure of the company
and striving for more efficient operations,
it is necessary to reduce
the number of employees by 13
percent, most of which will be in
administrative personnel. It has
been calculated that the mentioned
changes in personnel will provide
an annual savings of about 16.5
million litas.
"The global economic weakness,
reduced purchasing power of
customers and a complicated situation
in the company is forcing us
to make non-popular but necessary
decisions," said Urbonas.
After implementation of the
forecast measures, Lithuania Post
could finish 2010 with a 17 million
litas loss. "After revision of the
contracts with current providers
of IT, money collection, cleaning,
security and other services, we
managed to save 4 million litas
in annual expenditure," boasted
Urbonas.
One of the additional cost-savings
ideas is, from Feb. 1, organization
of operations in most rural
post offices will be changed. They
will now open only five working
days a week. "Considering the reduced
need for postal services in rural
areas, we decided to reorganize
the work of post offices on Mondays
and Saturdays; this will allow for
2.5 million litas in yearly savings,"
says the director general.
Thus, from Feb. 1, mail delivery
to rural areas will take place
five days a week, from Tuesdays
through Saturdays. Delivery in urban
areas will not change; letters,
parcels, newspapers, journals will
be delivered six days a week, from
Mondays through Saturdays. There
will be 129 urban post offices.
There will also be planned the
possibility to give to the administrative
employees from one to four
days of unpaid leave per month.
This would allow for the savings of
up to 5 million litas. Other ideas include
the optimization of logistics,
routes, etc.
Without making any changes in
the organization, the possible loss
in 2010 could be more than 50 million
litas.
Lithuania Post now has 7,627
employees. The postal network embraces
736 stationary post offices
and 28 mobile ones. Following the
order of the director general, closing
the post offices, planned by
previous management, was discontinued.
The suggestion by the trade
unions regarding the minimum
length of the work day in the rural
post offices was accepted, which
was that rural post offices will work
at least two hours a day.
