Business Times

Sri Lanka Post ventures into financial services to reduce operating deficit

By Bandula Sirimanna

Sri Lanka's Postal Department is to provide more customer friendly financial services to boost revenue and reduce its operating deficit, running up to staggering Rs.2. 6 billion.

Postmaster General M.K.B. Dissanayake told the Business Times that the department’s four-hour express courier service is being operated in the Colombo City and suburban areas successfully from the main hub at the Central Mail Exchange at D. R. Wijewardena Mawatha, Colombo.

Motor cyclists have been deployed for the courier service and they undertake to deliver parcels or mail up to a maximum weight of two kilo grams. Vans will be used to deliver parcels. The collection of mail and parcels outside Colombo will be done at Moratuwa, Nugegoda, Kadawatha, Jaela, Homagama, Panadura and Negombo post offices. The new service is now providing a stiff competition to private courier services which were earlier having a market share of around 75%, he said.

"Lots of private courier agencies are also providing the same service," said Mr Dissanayake “But they charge a certain amount and provide a better quality of service. If we can maintain the quality of service, there is no doubt that any customer would be prepared to pay," he added. Like many government departments and enterprises, Sri Lanka Post is running a deficit largely because its services are under priced. Business mail which consists about 75 % of its business, costs an average of Rs 10 to deliver but earns only Rs 5, Mr. Dissanayake said.

The department has introduced an online bill payment system recently to almost all its 6,500 post offices. The customers will now be able to make their electricity bill payments at the nearest post office, and their money will be debited to the Ceylon Electricity Board (CEB) on the same day. He said that this facility will be extended to sub post offices as well. He added that postmen will also be engaged in the collection of Electricity bill payments, collecting money from customers and issuing a receipt at their residences.

Mr. Dissanayake noted that almost all the post offices in the country will be networked and equipped with modern computer facilities Internet, fax, and wireless access in order to provide a better service to the people. Asked about providing motorcycles to postmen serving in urban areas, he said this is not a viable option as the department is not in a position to bear the costs. The department spends Rs.12 to Rs.13 to deliver a letter within the country but charge only Rs.5. Postal charges need to be increased to cover these expenses, he said.

The department plans to venture into agency financial services to boost revenue and reduce its operating deficit. Discussions are underway with some state and commercial banks to accept savings deposits at post offices on behalf of these banks.

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