THE CYPRUS Postal Service could face EU fines reaching the millions if it doesn’t get its act together, Telecommunications Regulator Vasos Pyrgos has warned.
In its 2005 report, the Office of the Commissioner of Electronic Communications and Postal Regulation (OCECPR) said that while there is sufficient competition in postal services, mainly due to express courier services, the government service has failed to meet requisite quality levels.
In 2004, the OCECPR fined the postal service £10,000 for delays in delivering letters; in 2005 the fine was £20,000, and in 2006 it reached £50,000.
Officials claim that Cyprus has fallen short of EU delivery targets because it is the only country in the EU where the postal services are not permitted to take independent decisions to upgrade their department.
“So far the EU has not turned its attention to our postal services, as we have regulated the matter internally. But if it does, then we’re certainly not going to be talking about a few thousand pounds in penalties,” Pyrgos told the Mail.
Brussels has given Cyprus and Malta a two-year extension (2013) to open up their postal services sectors, but Pyrgos said that drastic steps were needed if the Cyprus Postal Service was to become competitive by that deadline.
“Right now, if you impose a fine of £20,000, the money simply goes out one pocket and into another,” noted Pyrgos, alluding to the state ownership of the postal services.
“That will all change once the market is liberalised. Someone is going to foot the bill,” he added.
Lack of flexibility and poor efficiency are said to be the post’s chronic weaknesses, with some saying that key managerial and operational posts are left vacant.
Parliament has drafted a bill proposing to make the postal service a semi-governmental organisation that will be able to run its own day-to-day affairs.
But any sweeping changes to the regime are almost sure to provoke reaction from civil servants.
Glafcos Hadjipetrou, head of the civil servants blanket union PASYDY could not be reached for comment yesterday.
The Cyprus Postal Service still has a virtual monopoly on the market. As a state service, it is obliged to provide services to remote and hard-to-reach regions that may even be unprofitable to serve.
However, if it is able to prove that by providing service to hard-to-reach areas it runs a loss, then it will be eligible for reimbursement from a special fund.
Moreover, current regulations give the government service an edge over private couriers.
For instance, for parcels weighing up to 50 grams, a courier service is obliged to charge three times the rate of the post office.
“Obviously such practices would cease to exist upon liberalisation,” said Pyrgos.
“The challenge here is to give the postal service a business-like administration.”
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