UK's Royal Mail could consider part-privatization

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(Agencies)
Updated: 2008-12-16 18:52

LONDON -- An independent review of Britain's state-owned postal service, due to be published Tuesday, is expected to call for the company to be partly privatized and could put as many as 50,000 jobs at risk, according to media reports.

A woman posts letters in post boxes, in London December 15, 2008. An independent review of Britain's state-owned postal service, due to be published Tuesday, is expected to call for the company to be partly privatized and could put as many as 50,000 jobs at risk, according to media reports. [Agencies]

The review, by Richard Hopper, a former deputy chairman of Britain's media watchdog, is expected to say that Royal Mail, which is burdened with an unsustainable multibillion-pound pension deficit, should allow private, rival mail operators to buy stakes in the company and should close half of its 71 mail centers, according to a report by The Times of London newspaper.

Meanwhile, the Daily Telegraph newspaper said that Royal Mail already has plans to sell at least a third of the company to a foreign postal company in a deal worth around 3 billion pounds ($4.5 billion).

TNT NV, a part of the Netherlands' former state postal service, and DHL, the parcel carrier run by Germany's Deutsche Post AG, are both interested in buying the stake, according to the report. The Telegraph did not say where it got its information.

Unions are concerned that such moves could mean as many as 50,000 jobs, out of the Royal Mail's total work force of 170,000, could be lost, according to The Times.

Hooper's review is also likely to discuss the Royal Mail's pensions deficit, which was 3.4 billion pounds in 2006, but is widely thought to have doubled since then.

The Royal Mail and the government's Department for Business both declined to comment on the report ahead of its official publication.

However, numerous media reports have quoted an unnamed source, said to be close to Business Secretary Peter Mandelson, as saying: "Our concern is to save the Royal Mail and secure its future, not privatize it."