UK government to sell part stake of Royal Mail to TNT

17 December 2008

British business minister, Peter Mandelson's call for part privatisation of the state-owned postal operator, Royal Mail, has bought angry response from labour supporters and the unions, who fear that as many as 50,000 jobs could be lost if the Dutch logistics company TNT goes ahead and buys a minority stake in the company.

The unions are bitterly opposed to such a deal as a review conducted by Richard Hopper, a former deputy chairman of Britain's media watchdog, and circulated among ministers suggests that the government should close half of its 71 mail centres and privatise the other half, which in turn would be broken up into different units where rival operators would be invited to buy stakes in the collection and sorting units while the 'last mile' delivery would be retained by the Royal Mail.

Presenting the findings of the independent review to the parliament, Mandelson said that the barring Royal Mails retail outlets all other operations needed to be part privatised in order to be commercially viable. "We and the Royal Mail have already received one expression of interest from the Dutch company TNT to build such a partnership."

"I very much welcome this approach; just as I will welcome other expressions of interest from other partners should they come forward. My department will pursue this in the coming weeks," he added.

Mandelson said that the findings of the review done Richard Hooper had suggested that new measures was required to revive the company such as "forging a strategic minority partnership" with a private company.

Even as the UK government ponders absorbing the £22-billion pension fund liability of the company, in order to make it more lucrative to investors, the Telegraph has reported that the government has already made plans to sell some parts of the Royal Mail to TNT for approx $4.5 billion.