The Ministry of Transport, Post and Telecommunication has embarked several legislative reforms to comply with EU requirements especially in the postal area where are being set up the conditions for liberalization of the market. Can you tell us how those measures actually apply to the Slovak Post?
At the moment we have a law in the Parliament about postal services going on. It is about to be passed.
What have been the main steps udertaken to get the prepared for the liberalization of the market?
The postal Act has been written to follow strictly the guidelines of the EU. It was also approved by the Slovak Post, it fulfils basic requirements for the liberalization of this market because there is a top weight limit of 1,000 grams until the year 2004. At the moment the top limit for postal services is 350 grams in the EU countries and we will adjust to this from the year 2004. The year 2004 is the closest year for our accesion to the EU and this law substitutes the previous law passed in 1946. My opinion is that this law should be absolutely compatible with the EU guidelines.
Some competitors say that Postal Act proposal does not respect EU legislation and EU Commission directive. What do you answer to those critics?
These comments have appeared in the press but majority of them were incorrect. For example it was stated that pizza delivery services should be also provided by the post and that is absolutely impossible and that it against the laws of the EU. Also the weight fact has been stated incorrectly, it was stated that the weight was increased to 1000 grams. The truth is that the limit at the moment is already 1000 grams. Other condition from the EU is to create an independent regulation office. The law creates this institution and that might have caused the problems to our competitors. This law states that every postal service should provide this institution basic statistical figures. If these companies according to the law will provide the postal services they will have to fill in these requirements. Slovak Post provides these information to the Ministry and Statistics Headquarters and our competitors are afraid of the revenue department. If they once claim these services statistically they also have to fill in tax claims according to this.
How do you see the concept of Universal postal service that the Slovak Post has to provide as compared to its private competitors?
Slovak Post provides the universal postal services. These mostly are letters deliveries and other common postal services, including parcels. The basic difference between us and our competitors is that we have to charge the same prices all over Slovakia for our services. It is the duty of the state that is a member of the World Postal Union to make these prices affordable for all the citizens all over the country. Our competitors providing these services today may choose the territories that are profitable for them. They can choose the places with lower expenditures, we have to deliver everywhere, even to the most distant places. This is the difference between the services provided by the Slovak Post and our competitors. State assigns postal exception regarding the letters up to 1000 grams for us. We are the only ones allowed to deliver these letters. The prices for the universal postal services are regulated by the state. That means if we want to raise the prices we have to ask for the permission of the Ministry and the Government. That is why we have these exception regarding letters up to 1000 grams. This is almost the same all over Western Europe.
Do you provide any express delivery service?
Last year we opened the express delivery unit and the courier services. The courier services is provided just to certain towns, that are Bratislava, Kosice, Banska Bystrica and Zilina and time of delivery is 90 minutes. The express delivery services are provided all over the country including so called business parcels with the next day delivery. This fulfills all the expectations of the delivery services. This was one of the important decisions when I came to work for the Slovak Post. In the year 1999 we prepared the program for the development of the Slovak Post until the year 2004. One of the major projects was to start these express and courier services. It is designed to bring money into the post. Our goal is to become a major part of the market regarding these services in Slovakia. We cooperate with the EPG group and Czech Republic providing the express services. EPG group encompases about 15 countries of the EU. This group provides a complete audit of our services and the level of information system. Because we fulfilled the conditions perfectly we were accepted immediately into this group. What is interesting about this service is if we don't deliver parcels from the countries belonging to the EPG group we will have to pay fees. That means we have to provide the information from our track and trace system via internet.
As far as 2004 is concerned, what are the plans of the post for this deadline?
There are a lot of projects we plan to enforce by then. The biggest one is to establish the financial system based on SAP. Another one is the logistics. We are installing automatic sorting machines in Zvolen and Trencin. There is another project regarding gaining managerial information, and then the establishment of the track and trace system that we use in priority business letter services. We are a member of the PRIME group and all the information about this are provided via internet. We were the first country out of the PRIME group to get this system started. For example Denmark started later then us. Our neighbouring countries don't provide these services. Another project is the electronic transfer of data, not just parcel and letters delivery, but also money checks where we speeded up the process. We also want to establish the virtual post. We have information about the similar project going on in Germany and Canada. Our client will get the same services via the internet as at the post. |
When do you expect to implement this project?
I would like to start this project by the beginning of next year. My colleagues went to see the way this service is provided in Canada. We also cooperate with the German Post. I consider this is a project to create new opportunities in the future. Even if we go back to the courier services project we expect profits within 5 years. Also the use of the internet by citizens should be remarkable in three years. That is why it is important to be prepared for this.
There are plans to transform the Slovak Post into a joint stock company. When do you expect this process to be completed?
It was a basic condition to have the property issues cleared out. This was achieved a year ago and there should be laws prepared for the transformation. We have to find a legal way of transforming the post into a joint stock company. We have seen few projects regarding this transformation and most probably will be approved a special law project. Or the Government will pass a law about transformation of all state owned companies into joint stock companies. In that case, all the companies should be a part of the Business Law Book.
Does this transformation into a joint stock company means a forthcoming privatization of some of your services?
The joint stock company to be created should remain a state owned company until next year's elections. The form of privatization and globalization will have an impact on the Slovak Post. We are aware that privatization in our sector is minor. Few postal sectors have been privatized and I expect further development in this area after the year 2003, maybe in 2004 after the Postal Union Congress. We should follow this development and create alliances in the postal sector. In this direction the Post should be privatized. There are possibilities in privatization, one of them is the entrance of a strategic investor or there could be a joint venture created. A fine example is our express delivery services unit. But the process of restructuring of the Slovak Post is essential.
The Slovak Post owns 12.3% of Postova Banka. What is your level of cooperation with that bank?
The biggest share holder is Konsolidacna Banka with 46%, owned by the Ministry of Finance. These 46% should be privatized. Also further 34% belong to Istro. The Slovak Post isn't selling its shares and has a 10 year cooperation contract signed with the Postova Banka. It is very important to have a strategic investor there with a long term perspective.
Don't you think that the privatization of the Postova Banka is going to change the level of cooperation that you already have with them?
I think if the strategic investor enters the Bank he will look at the relationship with the Slovak Post as well. He will define strategic objectives and this may be lacked by the Postova Banka at the moment. There is not a long term investor there. The cooperation should go on because the Postova Banka uses the Post offices for its retail banking network. I hope the experience will be brought from abroad so that the Postova Banka can grow. I feel stagnation in the retail banking now.
Last year, you increased your revenues from Sk4.8bn to 5.3bn. Are you satisfied with those results and what are your expectations for 2001?
The profit of the Slovak Post was until the year 1999 almost zero. The years 1999 and 2000 we had 235 and 275 million revenues before the taxation. This year we expect to make more than 100 million after tax. What is really important is the development of postal rates. I am a fan of rates system influenced by inflation figures. In the past, the rates were increased by 20 or 30% only once in a time. The profits will be determined by this system. The Slovak Post is about 6 bn property. The incomes are taxable. We were looking for the hidden reserves in the years 1999 and 2000 and underwent the organization change and decreased the number of employees by 200. The income is interesting for us, it is about Sk50 million. The Slovak Post should be profitable. If we look at the general salary, it is about 1000 SKK lower then in other economies.
What do you mostly ambition before the legislation election of 2002?
To continue the process of integration towards the Western countries. That is the only thing securing the development of the economy. I expect to decrease the unemployment in the future as well. I would like to keep the development of the Slovak Post and to keep the direction we set.
Note: World Investment News Ltd cannot be held responsible for the content of unedited transcriptions. |
