ST.PETERSBURG, March 31 (RIA Novosti) - The Russian postal service will incur losses of $36 million in 2006, its chief executive said Friday.

Speaking at the reopening after refurbishment of St. Petersburg's main post office, Igor Syrtsov admitted the company was facing losses, but said Russian Mail would be given 4.5 billion rubles ($162 million) as part of an investment program in 2006.

The funds will be used to build automated sorting centers in Moscow and St. Petersburg, and modernize post offices and transport, he said.

Syrtsov added that Russia would have over 20,000 postal offices offering Internet access by yearend, and that employees would receive a 30% pay raise in 2006.