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Who's Delivering the Mail?

Poland's decision to privatize the delivery of court documents is either a blow for public services or a boon for competition.

by Martin Ehl 11 February 2014

If by chance you are waiting for a parcel from a Polish court or the prosecutor's office (and you live in Poland), take note. From the beginning of this year, it won’t be a postman – namely an employee of Poczta Polska, a public company – delivering your letter or package but a staff member of PGP, a private postal operator, or one of its subcontractors. It might therefore happen that you’ll be picking up a subpoena at one of the Ruch-brand newsstands, in a small grocery store, a fishmonger’s, or even a pawnshop.

 

To everyone's surprise, PGP won the tender issued by the judicial system last year. Confronted by an open market, the traditional supplier, the national post office, lost. PGP had bid 80 million zlotys ($26 million) less than the post office for the annual delivery of about 50 million subpoenas and citations from the courts and public prosecutor

 

After more than a month of operation, the jury is still out on the quality of the new service. In particular, lawyers are angry that they have to go for their mail to various locations, that the staff of the hastily built private network isn’t sufficiently trained, and that these official letters are being stored on the shelves next to food and newspapers – to say nothing of the dignity of collecting work-related mail in this manner.

 

Poczta Polska has been defending itself – how else? – in court. The company argues that at the time of its victory in the tender PGP had not finished building its network, which it had declared in its bid. Poland's largest employer (86,000 employees, including 26,000 postmen) is clearly still smarting from losing a roughly 300 million zloty business from its annual 6 billion turnover.

 

PGP has countered with, for example, the assertion that more than two-thirds of its collection places operate on Saturday and some even on Sunday, which cannot be said of Poczta Polska offices. The case has a much broader dimension than it might seem at first glance. On one side stands the state juggernaut that dominates the market but is slowly and surely losing its position. And on the other side stands a group of private postal operators. PGP agreed to cooperate not only with the Ruch newsstand network (which also has a license to act as a postal operator), but also, and more crucially, with the dynamic company INPOST of entrepreneur Rafal Brzoska. INPOST has become famous for its yellow paczkomaty – large boxes where you can pick up, whenever you want, your mail and parcels – found at a growing number of locations across Poland. The company is now expanding with the machines into other countries, especially the United Kingdom.

 

According to some reports, Brzoska wanted to gobble up PGP and then sell it to some large foreign operator. And then it was only to be a swift slide down for Poczta Polska.

 

So forced by European regulations, Poland is demonstrating what one can do even with a well-established public service: save the state some money. That, however, comes at the cost of a certain level of convenience for customers accustomed to that slow and cumbersome, but still deep-rooted service. You hear on the one hand criticism of yet another privatization of a public service, but on the other, talk of the pressure of competition. With Poczta Polska, for example, it is well-known that postal employees are much more conscientious when delivering money, because they usually receive a small tip, while for letters they prefer to just leave a notice so they won't need to spend any more time looking for the recipient. In contrast, PGP employees receive bonuses for making deliveries directly to the addressee.

 

Critics are calling the results of the tender “the greatest experiment of the Polish judicial system.” If it succeeds, it will mean a small step for free trade, but a great leap forward for the post-communist mentality, whose main feature is dependence on the state for everything.

Martin Ehl
 is the foreign editor of the Czech daily Hospodarske noviny, where this column originally appeared. He tweets at @MartinCZV4EU.
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