Revamped Review: Russian Post in the Hot Seat Again
Russia's Accounts Chamber Highlights Issues with the "Position of Russia"
Let's take a closer look at the latestabuzz surrounding the prominent state company, "Russian Post." In 2023, this postal service giant found itself under the microscope after losing a whopping 24.5 billion rubles in a year, prompting an audit by the Federal Treasury. Unsurprisingly, this wasn't the first time concerns about the company's operations had been raised.
Valentina Matviyenko, the Federation Council Speaker, described the company's financial situation as grim, stating it was in a "very dire" state, with a dreadful "hole" in the budget. In response, the company's CEO, Mikhail Volkov, conceded that the financial situation was indeed "extremely challenging," but emphasized that the company was persistently fulfilling its social duties in the regions.
After a year-long collaboration with the Accounts Chamber, "Russian Post" publicly announced that they had addressed major issues that had long been overlooked, paving the way for significant changes. The company claimed an operational profit and a 35% increase in labor productivity, all while continuing to serve their social function. Exciting developments, huh?
Modernization Misadventures
According to the Accounts Chamber's report, "Russian Post" received 17 billion rubles in budgetary investments over four years to modernize 3,300 rural and remote post offices. However, these funds were used inefficiently, with only 723 postal offices being modernized - a fraction of the planned number.
A cause for major concern is the lack of a list of postal offices to be modernized by 2030, which could compromise the President's goal of modernizing at least 25,160 postal offices by that very year.
Diving deeper into this report, we find that the Strategy for the Development of Russian Post until 2030, adopted in 2021 and left untouched since, is a bone of contention. SP auditor Danil Shilkov points out that this strategic planning document is non-existent, leading to ambiguity about the long-term development goals of postal communications.
Social Functions Floundering
Apart from modernization woes, some of "Russian Post’s" social functions are being executed inefficiently post its transformation into a joint-stock company. Notably, the number of postal offices operating during reduced hours has nearly doubled from 2020 to 2023, while mailboxes outside postal offices have experienced a 50% decrease. As of the beginning of 2024, over 6,000 postal offices have been temporarily shuttered due to staff shortages, unprofitability, and premises shortage.
Questionable Management
The Accounts Chamber's report also criticizes the management system of "Russian Post." The organizational structure of the company has undergone 25 revisions in five years, leading to an inflated number of advisors and exorbitant pay. The leadership has been constantly in flux, with the position of deputy general director being held by a staggering 53 people over four years, with an average tenure of one year and five months.
Moreover, the board of directors fails to perform its duties, neglecting to develop essential documents such as those related to personnel policy and labor remuneration in Russian Post. The corporate structure of the company remains unapproved, and the board of directors does not participate in managing dependent companies of Russian Post.
The recent report unveils the stark reality of a company grappling with management problems and inefficiencies in its operations, leaving many to question whether it can effectively navigate the challenges ahead. Stay tuned for updates on these developments!
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- Given the current financial struggles of Russian Post, various stakeholders are questioning the efficiency of its business operations, particularly in regards to the mismanagement of budgetary investments allocated for modernization.
- The concern over Russian Post's financial situation extends beyond the immediate impacts on the state company as it also raises questions about their ability to effectively fulfill their social functions, such as maintaining appropriate hours of operation for postal offices and ensuring adequate mailbox availability.
