The Competition Authority's tender to find a supplier for universal postal services in Estonia prompted a single bid, namely by state-owned Omniva. The company, which in recent years focused on parcel delivery services, has lately faced a lot of criticism for its reduction of basic services.
The Competition Authority confirmed on Tuesday that there has been just a single bid for Estonia's universal postal services tender, and that it was submitted by state-owned Eesti Post, the company behind the Omniva trade name.
According to Omniva CEO Ansi Arumeel, providing such a universal service is the company's main task. The company's supervisory board decided last week to allow management to bid for the tender, provided Omniva is able to base its offer on a profitable arrangement that also includes a "reasonable" margin.
"Every company, no matter whether state-owned or private, has obligations before its customers and employees as well, not only its owners," Arumeel said. "Eesti Post has to be able to pay its employees a competitive and appropriate salary as well as offer its customers quality services."
In the case of universal postal services, this means that the state has an obligation to make sure that prices are based on cost, and also to compensate the company arranging the services for undue losses.
In 2018, Omniva's universal postal services business ramped up a loss of €4.9 million. Added up, losses in the 2019-2023 period are forecast to exceed €40 million, the company said.
Universal postal services include domestic and international mail of a weight of up to 2 kilograms as well as parcel services of up to 20 kilograms. The contract covers all of Estonia and runs for five years.
According to Omniva, over the past few years most of the losses of the universal postal services branch were compensated with gains made in other business areas. As the company says, this approach isn't sustainable, which is why the pricing model has to change.
Editor: Dario Cavegn