Mr. Christoph Mueller:

The list is extensive. As there has been some duplication, I will try to answer in a logical sequence. Deputy Harrington asked a key question about An Post's service portfolio now and into the future. I agree with him that the subsidiaries are very successful in meeting new business opportunities in areas not traditionally served by An Post. Their success, as measured by their the contribution to the bottom line, speaks for itself. In the weeks to come, I will try to answer the key strategic question of whether that success can be leveraged to compensate for the decline in mail volumes. We have a five-year plan. We will challenge that piece by piece to see whether our assumptions are optimistic, conservative or just about right.

I believe e-commerce is an important aspect of this discussion. I have said that it might have upsides and downsides. I have looked at the examples of countries like Canada, which also has a sparsely distributed population. Online shopping is now the predominant thing. The increase in the number of parcels being sent by companies like Amazon has the potential to compensate for the decline in letter volumes. If that pattern continues, the owners of supermarkets like Tesco, Centra and Aldi will comprise the next group to come to this forum. They will ask the members what they are doing about online shopping substituting its business. The macroeconomic view of things is that the amount of goods purchased will always be 100%. If online shopping increases at the expense of local retailers, they will come here and say that the local retail sector, rather than the post office, is the true centre of the little town.

We will not be able to stop this development. We will not even be able to influence it. In the absence of widespread broadband Internet access in rural areas, all of this is speculation because people are unable to complete their shopping with sufficient speed. I have not even mentioned the payment mechanism, which is the most crucial aspect. Given that broadband coverage is very patchy in some areas outside the M50, I am still surprised that the two largest airlines in the country are selling 100% of their tickets online. It is an exercise in itself for a person in the midlands to print out a boarding pass. I believe that needs the enabler to really leverage that fully. It is a good example of how new business can be generated for the post office delivery system, which is separate from the retail system.

When I was asked about Sabena yesterday evening as part of my fitness test for the Central Bank, I responded by saying that as far as I know, six books have been written about the company and I have participated in five of them. A great deal of evidence is available. I will give the short version of the long story. Sabena went bankrupt because its second largest shareholder was unable to live up to its funding obligations, which had been issued years before. The shareholder in question owed us approximately €450 million. The Belgian state was not in a position to bridge this gap because of state aid rules. The airline received special permission from the European Commission but it came too late. It ran out of fuel very rapidly even though a couple of days previously, its employees agreed to severe restructuring measures which would have kept Sabena alive if it had been able to receive the promised funding. That is the short version of the story. I am happy to go into more detail.

Technology has been mentioned a couple of times. Of course technology is an enabler. We always think about the contributions made by barcodes, sorting centres and more fuel-efficient vehicles. I believe the introduction of postal codes should gain more prominence in this discussion. That would be an enabler which would make the sorting process more efficient. It would allow us to save more money in the big sorting centres and thereby increase our potential for subsidising the post office and delivery networks. That is very important. I compare the current system to the one-year knowledge test that has to be passed by London taxi drivers. They used to have to cycles all the streets on their bicycles so they would know them.

If a letter was posted in Boise, Idaho with the address "3 The Needles, Howth, Ireland" written on it, one can imagine the problems we would have bringing it the last mile, not to mention the problems with pre-sorting in the United States. The use of postcodes is an international norm. I believe we can squeeze out more efficiencies by introducing a really good system here. The knowledge that used to be required of London taxi drivers has become redundant with the introduction of GPS. We continue to have a high justification for our delivery network because the local postman is the only person who knows where "3 The Needles" is. That is an important aspect we must factor in at an early stage. It has upsides and downsides.

The upside is that we can work more efficiently and set more money aside for the delivery network.

The universal service obligation has been widely debated and in my view it is good for the customer. However, it represents a barrier to entry for new entrants and this must be recognised if competition to improve the system is to be permitted. On the question about ComReg, it may be too soon for me to answer as I have to study the matter some more. The national lottery is very important even though the contribution to the bottom line is €2 million or €3 million. We need to have our fixed costs allocated to a broader revenue base. The licence will be for 20 years and the up-front payment for the licence is prohibitive for An Post on its own. I refer to articles in yesterday's newspapers about possible constellations but it is for the management to communicate to the public the plan for the lottery tender.

I see a real conflict. My personality is not such that I try to avoid the moment of truth. The real conflict I see is with what is closest to our hearts, what makes An Post one of the brands most trusted by everybody in Ireland. Most An Post employees are motivated to go the last mile, in particular, the local post office and the postman. This is the most unprofitable part of our entire business. That is basically the question we will have to deal with. The Government has given An Post a very clear mission. There is no risk of any sudden or significant impact. The universal service obligation is in place but we need to take a hard look at it. In the case of certain airports they were never allowed to subsidise traffic, parking and air navigation charges with the proceeds from airport parking and retail revenue. I believe the situation with regard to the post offices is similar. We have to live with the fact that in order to keep some unprofitable parts of the business they will need to be cross-subsidised. However, cross-subsidisation means that someone has to pay over the odds for other parts of the service portfolio. My contribution will be to find that balance.

The board of An Post is perceived as the honest broker which is what is required to find the right balance between the role of An Post in national society in Ireland, the taxpayer who indirectly owns the entire business and finally, the customer still being able to afford to post a letter. This is the balance that needs to be achieved. Now when I drive to work in the mornings I see so many postmen whom I never noticed before. They are all very well groomed, they wear their uniform with pride and the vehicles are well maintained. A motivated workforce is a very good starting point. My new colleagues on the management team inform me that a job at An Post is still regarded as desirable by young Irish people. That is a good start. There is no silver bullet. We have to broker the future.