The Hongkong Post will expand its speed post service on the mainland as well as other countries and regions in 2008, to increase sources of revenue and to sustain its operation.

Postmaster General Tam Wing-pong yesterday said that Hongkong Post is currently going through tremendous financial pressure, one of the reasons being the latest round of civil service pay rise which means an additional HK$90 million expenses for the department.

"It's a serious issue for us as there may be further pay adjustments for our staff in the coming years, while the government has made its stance that it prefers to see no postage adjustment in the near future," said Tam.

Hongkong Post is also under enormous external pressure. Tam said that the Universal Postal Union (UPU) is considering introducing a new method of terminal dues, the charges paid to destination postal administrations for delivery of a letter sent abroad.

"It puts us at an advantage because we handle more outgoing than incoming mails. Postage in Hong Kong is also much lower than that in most other countries, which means we will end up paying higher dues to other posts than the other way around," Tam said.

While negotiations over the proposed new methods are still on the table at UPU, Tam said that Hongkong Post must explore new channels for making a profit through its international speed post business, whose prices and services Hongkong Post has control over.

"We'll expand our Next Working Day Speedpost to mainland in 2008 and include cities like Beijing and Shanghai, which should be a great business opportunity in view of the Beijing Olympics," Tam said.

Besides increased coordination with mainland, Hongkong Post also expanded the options for sending bulk items to India as a part of its Speedpost FreightPlus Service. Meanwhile, Hongkong Post expects to launch new speed post services to England and Spain later next year.

As Hongkong Post is currently a Trading Fund government department - one that has to meet an expected annual profit rate - it has hired a consultant to review the department's structure and possible options for future mode of operation.

"The review will begin in the first quarter of 2008 and will be completed in three to six months," said Tam. "Privatization is one possible option, though it may not fit the postal administration in Hong Kong."

(HK Edition 11/27/2007 page6)