Gov’t Makes Post Office Public Enterprise

Decision Could Attract Private Investors, Improve Services

Cambodia’s postal service will gain complete independence from the Ministry of Posts and Telecommunications by becoming a public enterprise, a measure that could pave the way for interest from private investors, officials said Friday.

During Friday’s executive session at the Council of Ministers a sub decree was approved aiming to “reform the management system of the current post office into a public enterprise, which is part of the working plan within the Ministry of Posts and Telecommunications,” the Council of Ministers said in a statement.

The statement added that the sub decree would also lay down a framework for the “modernization of the postal services sector by using modern information technology to trace packages” and “upgrade the post office network to remote areas.”

Phay Siphan, spokesman for the Council of Ministers, said the independence that will be afforded to the post office as a result of the legislation could possibly help attract private companies interested in investing in the service.

“They are asking for their own responsibility,” Mr Siphan said. As a public enterprise “it is open to private investment.”

Mr Siphan added that the advisory board at the post office will be completely independent of the ministry and, therefore, will be able to decide on all operational activities including aspects such as business partnerships and salaries for workers. The board will consist of three positions from the Ministry of Economy and Finance, Ministry of Posts and Telecommunications and Council of Ministers, who will then seek further expertise from the private sector, Mr Siphan said.

All profits generated by the post office will be directed toward state coffers, he said.

To date no decision has been made on whether the post office will be looking to attract outside investors or whether it will look to be listed on the forthcoming stock exchange, now a possibility in its status as a public enterprise.

Song Leng, director of the department of postal regulation, declined to comment when reached by telephone Friday.

But one senior official working in the postal department of the Ministry of Posts and Telecommunications, who spoke only on the condition of anonymity due to the sensitivity of the matter, said the decision to make the postal service a public enterprise would help to spur innovation and greatly speed up its operational activities.

The official also said that plans to attract private investment from foreign companies was already on the agenda with talks having previously been held with Canadia Bank to provide banking services as well as separate talks with the international delivery company DHL.

“Public enterprise is better as we will have more freedom,” the official said.

Kevin Kee, manager of DHL in Cambodia, said his company did not see itself as a business partner with the postal service.

“We are not focusing on anything in domestic postal services,” Mr Kee said.

Nevertheless, analysts said the decision to go public with the post office would create the right business environment to attract investors. But more independence comes with additional responsibilities, they said.

Scott Lewis, a managing partner at Leopard Capital, a private equity fund based in Cambodia, said the success of the future post office would be contingent on how its managerial team performs.

“It depends on how the managers are motivated,” he said, adding that proper reward-based incentive for those in charge should be at the core of the post office’s future business model.

Mr Lewis said that opening the doors to privatization would no doubt improve the current postal service-letters currently sent to the provinces take copious amounts of time before they arrive and door-to-door delivery is still very limited.

Hang Sochua, secretary general of the Cambodia Stock Exchange, said he was unaware of any interest from the government to list the post office on the stock market.

So far the Phnom Penh Water Supply Authority, Cambodia Telecom and Sihanoukville Autonomous Port are the only state-owned entities that have officially been put forward by the government to be listed, he said. (Additional reporting by Phann Ana)

 

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