Follow Singapore's lucrative lead, Legco report urges Hongkong Post
Hong Kong's post office has been greatly outperformed by its Singaporean counterpart in terms of both profitability and adapting to changing market needs, a study by the Legislative Council Secretariat shows.
A report on the study released on Monday criticises Hongkong Post for relying too heavily on "traditional mail business to generate revenue" and urges it to model itself on Singapore Post, commonly known as SingPost, in diversifying its services to meet market demands.
Net profit at SingPost in the last financial year was S$157.2 million (HK$879.2 million), up 5.1 per cent on 2010-2011, the report said. Hongkong Post lost a combined HK$167 million over three fiscal years to last year.
But a postal union leader rejected the comparison as unfair, as SingPost is corporatised and listed on the stock exchange.
"We are not allowed to increase postal fees as needed," Hong Kong Postal Workers Union chairman Cheung Wai-kuen said. "The government can say 'no' because it regards the postal service as a public service."
Hongkong Post also has its hands tied in terms of controlling staff costs, Cheung said. It has to follow annual adjustments in civil-service pay mandated by the government, regardless of its financial position or market rates. About 5,000 of its 7,000 workers are on civil service terms.
According to the Legco report, SingPost initiated corporate restructuring in 2003 to go from a domestic postal operator to a regional e-commerce logistics player. SingPost also provided staff with skills training and made use of advanced IT to enhance labour productivity.
SingPost management, the report said, "takes note of the changing market conditions and formulates appropriate business strategies".
Hongkong Post, meanwhile, undertook reforms in 1995 to be more commercially independent. While it remains a government agency, it operates as a self-financing entity supported entirely by investment returns from the Post Office Trading Fund.
Earlier this year as he unveiled the budget, Financial Secretary John Tsang Chun-wah said the government would review Hongkong Post's business operation to enable it " to expand its service offerings in response to market needs".
