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SCMP Reporter

TRADING Fund Status was necessary for the Hong Kong Post Office to cope with large increases in mail, parcels and packages, according to Nancy Law Tak-yin, the Deputy Postmaster-General.

  During the last decade, the number of postal items handled had doubled while staff levels had increased less than 23 per cent, she said.

  'The last 10 years have been tough but the post office has increased productivity and taken a range of measures to survive.

  'Machinery has been introduced and automatic handling equipment has streamlined procedures so they remain lean and competitive,' Ms Law said.

  'Sorting and internal office procedures have been tightened and wastage cut to a minimum so we can offer competitive services despite a lack of resources.'   Before Trading Fund Status was granted, the Government allocated funds to the post office under its status as a vote-funded government department.

  Profits from stamp sales, Speedpost and other services were handed to the Government to re-distribute funds to priority social services.

  Although the post office had recorded annual profits during the last decade, little was channelled back into postal services.

  'The Government had to distribute funds to more than 70 competing departments and the post office did not enjoy a high priority.

  'Lack of funds meant we did not get the resources we needed to expand, forcing us to cut back on some services,' she said.

  'Residential mail delivery was one of the services to suffer, being slashed from twice a day to once a day.'   Post office hours were reduced but offices are now open from 9 am to 5 pm, Monday to Friday, and from 9 am to 1 pm on Saturday.

  Lack of manpower and funds also forced the post office to halt expansion of its profitable Speedpost service and prevented it taking on more account holders.

  While the post office turned away prospective Speedpost account holders, commercial express post operators moved into the market to take the lion's share.

  'One Speedpost team could not be expanded and we were unable to provide pick up and delivery services all over the territory to account holders,' Ms Law said.

  'However, we were able to take Speedpost parcels and packages that were dropped off at designated counters.

  'With the mail service market more competitive and the post office outgrowing the structure of a government department, it was time for a long-overdue status change.' To stay competitive in the local market, the post office had to respond quickly to customer demand, which Trading Fund Status allowed, she said.

  It could not afford to wait for the Government to allocate funding in a budget for the next financial year.

  By the time the post office received government funding, customers had used commercial services, requirements had increased, or inflation had eaten further into profits, she said.

  The first step to Trading Fund Status was a review of the post office's services by the Economic Services Branch which then recommended a change in status to the Government .

  'Only government departments that have a proven track record for making a profit are eligible for Trading Fund Status,' Ms Law said.

  'The post office had been operating along similar lines to commercial operators and was highly accountable with strong profits despite the constraints.

  'The Legislative Council approved the status change on July 19 and we started operating under the new status on August 1,' she said.



Status change aids expansion