A few weeks ago, the public debate was about online train ticket bookings. This week it is the protests over fingerprint machines at Sri Lanka Post. Both Sri Lanka Railways and the Department of Posts are technically ‘departments,’ but in reality, they operate as commercial service providers of transport and postal delivery.
For decades, the post office was a vital part of life. It was where you went to make a telephone call, send a telegram, dispatch a money order, or simply stay connected. Even today, post offices still handle some payments, including traffic fines.
However, as with many Government-run services, every attempt to modernise the postal service is met with resistance. Before the uproar over fingerprint machines, the Department of Posts had objected to the digitalisation of traffic fine payments through the GovPay platform.
It is not difficult to see why. Each year, the postal service collects more than Rs. 250 billion on behalf of other agencies. Most of this money is transferred back to the respective authority, but the Department of Posts keeps a small commission.
For example, if you pay a traffic fine at a post office, the money goes to the Treasury, but the post office keeps a margin to cover costs. This may sound like big business, but after all the pass-throughs, what remains is not nearly enough to cover expenses, let alone make a profit.
Consider the numbers. Sri Lanka Post employs nearly 22,000 people. Salaries account for 85% of its recurrent expenditure. Unsurprisingly, in 2023 the department posted a loss of Rs. 2.3 billion. It runs 650 main post offices and around 4,000 service centres islandwide, with an asset base worth roughly Rs. 10 billion, according to accounts tabled in Parliament.
The problem is not hard to spot: the traditional postal service has lost relevance. Courier companies have captured the parcel delivery market, fuelled by the e-commerce boom. On-demand services like PickMe Flash have stepped into the role once reserved for post offices. Other than issuing stamps, its only true monopoly, the Department of Posts has no unique service left. It survives largely by acting as a payment collection agent for the Government, heavily subsidised by taxpayers.
This is why the uproar over fingerprint machines is a distraction. Biometric attendance is necessary, yes, but the real issue goes much deeper. We have a massive department with an outdated business model, shrinking relevance, and a growing financial burden. Fixing fingerprint machines does not fix the postal service. What is required is structural reform.
Two options are worth considering.
Option 1: Keep it under Govt. control but modernise
If the Government insists on running the postal service, then efficiency must be prioritised and assets must be monetised. Many post offices were established during the British era, often in prime locations at the heart of towns.
Today, these properties hold significant real estate value but generate no real income. Leasing, redeveloping, or partnering with the private sector to put these assets to productive use could generate badly needed revenue.
A good example is the concept of turning the iconic Nuwara Eliya Post Office into a tourism and hospitality venture. Such projects make sense; they preserve heritage while unlocking commercial potential. But this path requires transparent procurement, credible partners, and strong management, not the half-hearted deals that too often characterise State ventures.
Option 2: Gradually exit the business
The alternative is to recognise that postal services no longer serve a core function in modern life. The Government could retain essential tasks like stamp issuance and phase out the rest.
Another option is to form partnerships with private players who can leverage the postal network’s distribution channels more effectively. In this model, the Government steps back while allowing the infrastructure to be repurposed for services people actually use.
Either way, pretending that the system can continue as it is will only lead to further losses. Commendable as it is to introduce fingerprint machines, this is cosmetic change. A department with 22,000 employees, annual losses exceeding Rs. 2 billion, and assets of Rs. 10 billion cannot be ‘repaired’ with technology fixes when its very services are irrelevant to most people’s lives.
The postal service, once indispensable, is now at a crossroads. It can either reinvent itself or slowly fade into irrelevance, draining taxpayer money in the process. The courage to install fingerprint machines is good. The courage to reform or exit the business altogether is better.
What Sri Lanka needs now is a system change beyond the fingerprint.