The Russian mail service has a socially vital role in Russia, being a means of communication, payment and money transfer throughout the country. In a bid to attract investment to modernize the service, Finance Minister Alexei Kudrin suggested in April that Pochta Rossii be corporatized.
But Leonid Reiman, the minister of information technology and communications, said: "I do not think it feasible to change the legal organization of Pochta Rossii until 2012."
He told a Cabinet session that of the many countries that tried to privatize their postal services, few succeeded. "For example, the U.S. Postal Service is a government corporation and is subsidized from the budget to perform socially important functions," the minister said.
The Cabinet approved the measures Reiman proposed to modernize the network. A total of 50 billion rubles ($1.9 billion) will be allocated from the federal budget and Pochta Rossii's own funds to modernize sorting facilities, build new sorting centers and develop such services as money transfer and payment of pensions and social allowances.
Reiman said that although the service appealed for about 70 billion rubles ($2.6 billion), the earmarked amount will be enough to implement the main provisions of the modernization plan.
