The Maltapost success story

Nearly two years ago New Zealand Post's subsidiary Transend acquired 35 per cent of Maltapost and signed a two-year management services contract for the management and operations of Maltapost. The Nationalist government guaranteed that this was a dramatic breakthrough - Malta's postal services would improve beyond recognition and this would be a wonderful success story for everybody.

It has been indeed a success story. Transend has cut costs at Maltapost by shedding workers and restructuring its network. Prices have increased. Transend has secured a sale of the New Zealand Post-designed Postal Delivery Sorting System to Maltapost and placed an order for a number of systems to re-organize Maltapost's entire network. Transend has boasted that it is "delivering processing excellence to Maltapost". Maltapost is looking ahead to become profitable soon. So it has indeed been an impressive success story ... for Transend.

But is it a success story for the thousands of persons, hundreds of organisations and companies still using the postal services?

The Nationalist government had guaranteed that Transend's track record as a global specialist in postal consultancy would definitely increase Maltapost's customer commitment and introduce new services. We have now had two years experience to judge whether this promise has been delivered and whether Malta's postal services have improved.

In its three-year existence Transend have established a reputation for promising one thing and delivering the exact opposite. They tell their clients to cut costs but then it was standard practice for Transend executives visiting London to stay at the Intercontinental Hotel, requesting a premium "Hyde Park view" room for as much as NZ$1,238 (£450) a night. For a company advising on cost-cutting, Transend was peculiarly profligate. It delegated its air travel to Qantas without an open tendering process and used Kamden, a small business run by an old acquaintance of its managing director, for much of its marketing.

Transend ran into trouble in 2001 while helping the South African post office turn around mounting losses. The project faced difficulties with mail volumes 25 per cent below forecasts and no improvement in finances. Transend's contract was terminated early, without compensation.

A leaked report of an investigation and audit carried out on behalf of the South African government suggests NZ Post misled the South African government to win the controversial contract to run the country's postal service.

Prepared by international forensic auditors Kroll Associates, the leaked report contained allegations that NZ Post officials won the bid by saying they could make the massive loss-making postal service break even within three years, which they later conceded was not possible.

South Africa cancelled the $54 million contract halfway through its three-year term last June, by which time the promised breakeven point was a $228 million loss and Transend left the country with its tail between its legs.

The Kroll report described Transend's handling of the South African project as "disjointed", "unco-ordinated", in "disarray", based on "unrealistic budgets" and failing to deliver on agreed financial targets.

Transcending buzzwords

The Nationalist government's ideological dogma blinded it to these disturbing facts. It dismissed the Labour Party's criticism and declared that Maltapost would automatically become more efficient and its services would become more effective. Its partnership with Transend would make it join the 21st century, as it would not remain an outdated public monopoly. It all sounded nice and impressive. But stubborn facts tend to refuse to fit comfortably into dogmas. Reality has set in. People have been raising their voices against the poor services being offered by Maltapost.

To make it worse and more painful, apart from having to pay more for inferior postal services, we also have to pay taxes to finance the Malta Communications Authority. This Authority states "two main objectives with regard to the postal service sector: attaining a liberalized environment that is capable of sustaining competition among the respective players and ensuring that residential and business consumers get the best value for money, coincident with addressing social inclusion aspects." The Postal Services Act also empowers the MCA to set "quality standards" for inland mail.

People expect the Authority to intervene on their behalf and ensure that Maltapost does not operate exclusively in the interest of its private shareholders but first and foremost in the interest of the public it declares to serve.

Once upon a time, a government department financed by taxes ran the local postal services. It had established itself as one of the most efficient public services. Mail was delivered on time and the service had a human face and personal care. It offered the taxpayer better value for money than it does now. Bert Lance's famous utterance was quite appropriate for our postal services: "If it ain't broke, don't fix it."

But the Nationalist government, ideologically committed to liberalisation and privatisation at all costs, went ahead to fix the service and has now broken it in the process. How will we put it together again?

Maltapost's two-year management contract with Transend will soon run out. On the basis of their performance, it should not be renewed. It is not the first time that Transend have not delivered. They were kicked out of South Africa after they failed to deliver.

People want their mail delivered on time. They are fed up with glittering buzzwords like "customer care", "quality services" and "best value for money". They simply want a good service, which means that all restructuring and re-engineering action-plans have to focus on delivering mail and parcels on time.

evaristbartolo@hotmail.com