Wednesday, March 2, 2011


Subject: Rationalisation and consolidation of urban network.

D.G. Posts No. 40-06/2010Plg dated 25.01.2011.

Kindly refer to this office letter of even number dated 17.5.2010 on the subject mentioned above calling for views/suggestions from circles regarding need for rationalization and consolidation for urban network, road map to be followed and time frame within which the exercise should be completed,. Almost all the Circles have unanimously favoured the need for rationalization.

2. Due to historical reasons, a major portion of urban postal network lies in the inner city areas consisting of single/double handed non delivery Sub Offices which are not in conformity with the distance criteria of location of post offices. The outer and recently developed areas, however, suffer from lack of even the basic postal facilities in most of the towns/cities. There are also requests for providing postal services in various urban agglomerations, SEZ areas, professional colleges etc. which may also be a profitable activity of the Department .However, due to non-availability of resources, the Department is not able to meet such request.

3. While the entire rural network is subsidized, Post Offices in urban areas are expected to be initially self supporting, and should earn profit of at least 5% at the time of the First annual review , to be eligible for further retention. Despite this, as on 31.3.2010,as many as 5531 SOs in urban areas are reported to be incurring losses.

4. Further, as per the prescribed criteria, the minimum distance between two post offices should be 1.5 Km in cities with a population of 2 lakhs and above, and 2 Km in other urban Areas. No two delivery offices should however be closer than 5 Km from each other. Moreover, a delivery post office in urban area should have a minimum of 7 Postman beats. These norms have not been followed in many cases.

5. Our existing urban network consists of 15797 Post Offices comprising mainly of HOs and SOs.Urban expansion of the country is currently estimated to be 77370sq.kms. As per the prevalent distance norms, this area justifies only about 6000 Post Offices in urban area. This analysis suggests that we have 9797 Pos Offices in urban areas that do not conform to the prescribed norms. This situation warrants need for corrective measures.

6. Need for rationalization of urban network was appreciated by the Department as early as in the year 2003 which led to issuing elaborate instructions to Circles vide D.O. letter No. 40-4/2002-Plg dated 6.1.2003 for relocation/merger of single / double handed post offices. Resultantly, 1262 post offices have been merged/relocated throughout the country. It is however felt that the pace of relocation of post offices is not satisfactory and we are losing out on various business opportunities and the people in outer areas of urban settlements are deprived of the postal services. On the other hand, the Government is not allowing us to further expand our network by creation of new posts not only in urban areas but also in rural areas. Successive Plan Periods have witnessed opening of Post Office by redeployment of posts only without any new creation.

7. For rationalization of postal network in urban areas by way of relocation of Post Offices in new areas and creation of bigger Post Offices by merger of single /double handed Post Offices as per stipulated distance and other norms, the Circles should keep the following into consideration:

(i) There are some Post Offices which are loss making due to high rentals e.g. Post Offices at Railway Stations, important bus terminals, airports etc. We may however not relocate them due to their strategic importance, convenience they offer to the people and high number of footfalls they attract.
(ii) While assessing the need for postal facilities we should have close liaison with local bodies like Municipal Corporation/Municipal Committees, Town Area Committees etc. so that we can be aware of their future plans of expansion of cities and we can accordingly formulate our strategies and have a long-term plan for extending our network in such areas. Regular coordination meetings may be prescribed with such bodies at appropriate levels.
(iii) Post Offices which have been covered under Project Arrow/Post Offices functioning in departmental buildings should not be earmarked for relocation. If there are other Post offices in their vicinity the same may be considered for relocation.
(iv) Post Offices paying high rentals, having low volume of transactions and running in losses should be considered for relocation/temporary merger/permanent merger.
(v) Distance from the nearest post office and the business being transacted should be the main criteria for relocation. Merger of Post Offices.
(vi) In addition to relocating post offices from one area to another, we can also create bigger Post Offices, not below the rank of LSG Offices, by merger of several smaller scattered Post Offices. The bigger Post Offices will be well equipped to cater to the latest postal facilities like IMO,eMO,Videsh MO, IMTS etc. These newly created Post Offices will be manned by redeployment of staff/posts from the nearby post offices.
(vii) It may also be considered to reduce the number of delivery Post Offices, which may lead to obviating the need for the nodal delivery system for Speed Post articles as it is not providing to be cost effective. In any case there is a need to strictly follow the norms of the distance of at least 5 KMs between two delivery offices and also that of delivery Post Office in Urban area having a minimum of 7 Postman beats.
(viii) If opening of a post office is justified in an area, but it is not possible to open post office by relocation or under the Plan targets, opening of franchise outlets may be considered for such area.
8. In, view of the above, Circles are requested to take the following action:

(i) Identification of Post Offices which are at lesser distances than that prescribed under norms. In case, more than one Post Offices are not fulfilling the distance norms, Post Office (s) may be earmarked for relocation on the basis of :
(a) Condition of building
(b) Profitability of Post Office
(c) Business of Post Office

(ii) PMsG/CPMsG will interact with all the stakeholders and convince them that relocation and merger would help in providing postal facilities to public and it is in larger public interest.
(iii) Identity needy urban and rural areas where there is justification for new Post Offices.
(iv) Post Offices once indentified as per (i) above, will be relocated /merged This will outside the Plan targets.

9. Circles are requested to complete the exercise in respect of sub para (i),(ii)and (iii) {of para 8) by 31.03.2011 and in respect of sub para(iv){para 8} by 30.06.2011. Circles are also requested to send monthly progress reports of action taken, to this Directorate(proforma enclosed).

10. Since the need for opening of Post Offices in new locations seems to be ever increasing , Circles are also requested to open Post Offices by redeployment of posts/staff from the existing office(s), by curtailing staff strength of the existing offices even to less than the justified workload of the office/offices. This exercise would, however, be subject to Plan targets set by the Directorate. The powers for redeployment of Group 'C' and 'D' posts have already been vested with the HoCs vide Directorate letter No. 2-2/93-PE-I dated 7th of Sep, 1993.Under no circumstances should the surplus posts be abolished.

This issue wit h the approval of the competent authority.
(Anurag Priyadarshee)
Director (R.B)

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