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Matthew Vella
Transend Worldwide Ltd came to Malta hot on the heels of what had been described by the New Zealand ACT Liberal Party as the “disastrous excursion” following the cancellation of a NZ$54 million contract with the South African postal service.
The news that the New Zealand Post subsidiary and the Malta Government Investments had signed an equity and two-year management deal, taking a 35 per cent stake in Maltapost through the purchase of 980,000 shares, was met with a cold reception in New Zealand.
“NZ Post had promised the South African post offices would break even in three years,” Rodney Hide, ACT’s finance spokesperson, said following the deal in February 2002. “They failed, with negative repercussions for the South African Government, the New Zealand Government and our country’s international reputation. They haven’t learned any lessons, choosing instead to repeat their mistakes in a different country… NZ Post is owned by the Government, so it isn’t subject to normal commercial accountability. It has also managed to escape proper parliamentary accountability.”
Transend had been under scrutiny following a critical Pricewaterhouse Coopers report on its European operations. It had failed to establish an operation in Spain, where it spent NZ$3 million setting up a Madrid branch based in an upmarket suburban house with a swimming pool which closed after four months. Robert Lake himself, the Maltapost CEO, had been given a payout earlier on by NZ Post of NZ$208,000 before being called back by the company to be placed in Malta.
Following a hand-over which would have taken almost seven months, the company will revert to Maltese management in the hands of former METCO chief executive Stephen Sultana as CEO.
Jesmond Bonello, of the Union Haddiema Maqghudin, reflects on the changes Malta’s postal service experienced at the hands of Transend, the first to grab the bull by the horns at Maltapost. “The change at Maltapost was most difficult when it came to restructuring. The reduction of the workforce was coupled with an increase in work. The fact is that Transend’s changes and the restructuring process should have been refined to suit the Maltese context. In our hot climate, increasing postal workers’ beats to compensate for the reduced workforce is quite hard.”
Bonello finds little to complain about Robert Lake. The restructuring process, however, which came late in the day for Maltapost, created a vacuum according to Bonello: “I think they did not calculate how much of the ‘restructured’ workforce would leave to find a new job or retire, and the company was basically left with not enough workers to make good for that contingency.”
Indeed, only last May, Maltapost called back fourteen workers into service from the 160 workers it had managed to get transferred to the public service. Back in 2002, Transend’s managers set out to cut Maltapost’s workforce of 816 to 550. The prolonged battle with the UHM, fiercely opposing any redundancies, dragged on through the best part of 2003. The EU referendum in March and the general elections in April, had pitched the call from above for all forms of negotiation to be postponed until serener days. No boats were rocked until all was well and good for the Nationalist government.
Bad planning? Already in 2002, the fate of Maltapost workers was reflecting the uncertainty waged upon the company by dilly-dallying administrations of the past, a factor which the UHM always brought out into the limelight throughout the negotiations.
Back in the nineties, Government seconded postal workers from the company into the public service and at the same time replaced them with new workers; in 1998, a collective agreement with the General Workers Union set a fixed complement level at Posta Ltd; and by the end of Labour’s then tumultuous administration, Minister Joe Debono Grech dissolved Posta Ltd as it had been incurring losses at a time when so many other white elephants were draining the country’s finances well into the end of the decade.
According to the European Foundation for the Improvement of Living and Working Conditions, Transend is reported to have invested Lm1.3 million in Maltapost for “major reforms meant to reduce costs and upgrade operations” to meet EU requirements.
“The difficulties we are facing include the existence of a policy not to employ new people, unless they hail from the Industrial Projects and Services Ltd,” Bonello says.
The IPSL was a surrogate company created to absorb a surplus of 900 workers formerly employed by the now defunct Malta Drydocks and the Malta Shipbuilding. Its workers were transferred into the public service, local councils and other private companies – a clearing house for the excess dock and shipping workers. “I don’t think they have the stamina to do this job because of their age. It is important to start off from a young age in this job.”
Bonello however believes the lesson to be learnt from the Transend venture is the way restructuring has to be managed. Since the time the management passed into the hands of the NZ Post subsidiary, the restructuring process led to a deterioration in the service, especially following the Christmas fiasco when letters and cards were delivered even up till mid-January; and the end of same-day delivery.
“It has also dampened the morale at the post office. Postal workers like their job. The transfers from one department to another has also changed the character of the service. The changes at the postal service have been long overdue since the nineties. Restructuring means a total change of operations.”
matthew@newsworksltd.com
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