Brazil’s Government Set to Announce Privatization of Postal Service “Correios”

RIO DE JANEIRO, BRAZIL – The Brazilian Postal and Telegraph Company (Correios) is on the list of seventeen state-owned companies that will be privatized later this year. According to Brazilian media outlet G1, the announcement is to be made this Wednesday, August 21st.

In the justifications for the privatization of the postal service, Minister of Economy Paulo Guedes points out corruption, political interference in the management of the company, inefficiency, constant strikes and loss of market to private companies in the delivery of goods sold over the Internet and e-commerce.

As examples of inefficiency, the study points to the “high rate of loss”, and slowness in the compensation of lost products.

In the studies for the sale of the state-owned company, the Ministry of Economy points out the R$11 (US$2.75) billion hole in the employees’ pension fund, Postalis. In addition, Postal Health, the plan that serves employees, has a deficit of R$3.9 billion.

The study says that the post office carries a fiscal risk of R$21 (US$5.25) billion.

In June this year, the Federal Supreme Court (STF) decided that the federal government can not sell state-owned companies without the approval of Congress and without bidding when the transaction implies loss of control.

(Source: G1)

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