Well aware that CTT - Correios de Portugal - is struggling to hit targets, set in place as part of its privatisation, the government has decided to set up a working group in the expectation that a new set of measures will solve the Post Office's structural problems.
The Government will create a "work programme" by the end of March 2018 to analyse CTT’s service, to suggest improvements and, more concerningly for CTT's management, to look at the contractual responsibilities in the concession agreement.
The PS request refers to CTT’s “service, quality and network coverage standards as set forth in the Law and the Concession Agreement."
The sale of CTT, under Pedro Passos Coelho's government, yielded over €900 million to the Treasury and was achieved in two stages: in December 2013, the State sold 70% of the company's shares at €5.52 a share, and in September 2014, sold the remaining 30% at €7.25 per share.
The shares closed at €4.50 today, a gain of 15 cents.
This is serious news for CTT’s management which has failed to address a predictable shift in consumer behaviour away from posting letters, to using email. The ‘CTT bank’ pilot project has had a high start-up cost when interest rates are at historic lows.
In mid-November, CTT’s management announced that it planned to shed staff in a cost-cutting exercise to prop up its share price but a foolhardy dividend fooled nobody.
CTT, led by Francisco Lacerda, is to cut up to 300 of its 10,000 staff as part of a restructuring plan which analysts remain wary of, citing ‘regulatory hurdles.’
