Minister of Communications Yoaz Hendel, from the center-right New Hope party, declared his intention last week to fully privatize Israel Post. This is a drastic increase from the plan passed in 2018 to privatize only up to 40% of the postal company. Critics expect any form of privatization to damage Israel Post’s service to the country’s citizens. This plan would remove much of the government’s supervisory and regulatory role regarding the postal service, allowing Israel Post to determine prices for most services and function as business rather than a government authority.

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Minister of Communications Yoaz Hendel. (Photo: Gili Yaari / Flash90)

A policy paper from Net Profit, an Israeli financial consulting group, holds that the reform was proposed in a hurry, without time for serious examinations of the potential effects of privatization.

Even in its mostly public form, the Israel Post is not able to provide adequate service, as was noted by MK Michael Biton of the centrist Blue and White party, who chairs the Knesset’s Economic Affairs Committee. “It’s clear that there’s a resistance on the government’s part towards privatization of the mail system. According to Israel Post’s presentations, the mail service has improved. But according to what one hears from the citizens, there are crises in the functioning – packages disappearing, delivery times, and other problems,” Biton said.

Israel Post CEO Dany Goldstein has said that the post office receives only about a thousand complaints every year, with an average of 45 million annual visits to post offices and about 300 million letters and 57 million packages delivered each year.

People waiting in line at the post office in Holon. (Photo: Shutterstock / Roman Yanushevsky)

Israel Post has been in a process of improving its service for about six years. International evaluations of Israel Post have Israel in the 99th percentile in various metrics. Goldstein spoke about improvements in the recent years such as extending post offices’ opening hours, introducing a system to send text messages when registered mail and packages are delivered, improving package delivery services, opening hundreds of external package delivery centers, and opening a telephone and online customer service center.

According to Israel Post, the proposed plan does not actually solve the main problem facing the postal system – postal services generally operate at a loss, and the obligation to continue to provide loss-making postal services could cause Israel Post to collapse financially. Israel Post emphasized that although it is committed to universal service, it receives no budget whatsoever from the state. In contrast, private postal companies can compete with Israel Post by operating only in economically viable areas.