Mr. David McRedmond:

Deputy Michael Fitzmaurice asked whether the €30 million amounted to putting a patch on a tyre tube. The scale of the transformation in An Post will require a lot more than €30 million, but it is a very substantial contribution. It is our job to operate within our means and make the funding work for us. It is easy to accuse me of taking the economic view, but I do not have much choice. I have an obligation to ensure the service is sustainable for everybody, not least the State. The €30 million will be split on a 50:50 basis, with €15 million being used to implement our universal service obligation to deliver mail to every house in the State on every working of the week and the other €15 million being invested in the post office network.

It will take a lot more than €15 million to modernise the network but we have to find ways of doing that. We have some of our own assets that we have to take a look at. It is my job and that of the management team to make sure we find the funds to invest in the network. The investment is for a whole range of different things, from capital expenditure to paying to relocate post offices. I was asked if we would be more inventive and look at local shops that could take it on. That is at the core of what we are doing. Mr. Bobby Kerr mentioned co-location. There is a good reason for it because it is convenient for people. Where it is convenient for people, it is convenient for people. There is money for co-location.

There is the issue of the contract negotiations with the postmasters. It will require some investment in terms of what the postmasters make. There will need to be some funds if some postmasters leave the post office network as a result of these changes. It is not money for that; it is money for a range of things to modernise the network. It is only part of it. We have to fund a lot of this ourselves.

I was asked why we are not talking to a bank coming into Ireland. Before I joined An Post, it had a relationship with Fortis and it was unfortunate that Fortis closed. I have read about Sparkassen and what it wants to do. We have had some conversations with it but not at length. We need to do much more fundamental work on it, which we are doing. We are launching new services such as the smart account, which is about getting into a banking licence. We have to work out what that arrangement will be. I hope to come back here at some stage to tell the committee what those services are.

We have set ourselves up now in terms of how we are managing ourselves. Financial services are at the core of what we are doing. We will certainly be doing that and looking at potential partners including credit unions. There can be issues with credit unions, for example, they are local. They are not a group although there are some associations of credit unions. It might be difficult and there might be a different solution. If it was the only solution in a place then we would look at it but our energy will be spent on trying to find a solution across all post offices. In terms of building the sustainable future of the post office and whether we have a proper business plan, that is what we have been doing. I have spent a year trying to get the plan into place. We have the plan in place and we are making all the changes at the centre to be able to deliver the range of products I have been describing.

We have not made sufficient progress on the discussions with the IPU, which Deputy Lowry and other members raised. Those discussions reached a certain point and unfortunately in the middle of the summer they stopped. We wanted to start them again but for various reasons, they are only now just getting back on the table. I hope Mr. Ned O'Hara will agree those discussions are imminent. We are ready to have them. We have made considerable progress and have considerable agreement on a number of issues. I could not agree more with the members, in particular Deputy Lowry, on the need to get this to happen and to mobilise work. We have done it on our mails and parcels business and have made changes there in terms of mails and parcels.

Deputy Fitzmaurice asked about the issue of working with the HSE. It is one of the issues we are looking at on the mails and parcels side in terms of postmen and postwomen who pass by every house every day. It is something we are very conscious of. The committee should not misunderstand me - when I talk about the economics or good management of An Post I am not ignoring the social need. The only purpose of An Post is to deliver social need and we are all acutely conscious of that. The only reason we talk about these other elements is to make sure the social need can be delivered.

I was asked why we did not tender for driving licences and I do not know for sure. I understand the tender for driver licences specified there should only be one location in each county for driving licences. I may have that incorrect because it was a number of years ago but it made it difficult for An Post to tender. We can deliver it everywhere. If we do not tender we will not get it and my colleagues and I want us tendering for everything. We need to all be on the same page.

Deputy Stanley talked about the discussions with the IPU and I quite agree with him. We tested the difference between pricing a stamp at €1 and pricing it at 99 cent and there was not really that much of a difference. Has the €1 driven the 7.5% reduction? It is far less of a reduction than we had expected in mail volumes. It only has us pretty much in line with other countries. It is a bit faster than it was so it has probably accelerated it slightly. I am sure it has had some impact. Has it had the desired impact for An Post? Yes, because we would have lost €61 million. If we lose €61 million we are insolvent. We have debts and creditors and if we lose €61 million we cannot pay our bills. We cannot pay our weekly pay bill. The price increase in the stamps brought us back into a strongly solvent position whereby we will break even this year. I quite accept it will have a market impact and we have to watch that carefully as we go forward. We must expand the range of services, get the vision and take it by the scruff of the neck.

I have tried to share the vision for the post office network particularly with regard to banking, Government services and as the backbone of e-commerce. The Deputy said the parcel service is welcome and asked about the four mail centres and Portlaoise. I cannot say what exactly will happen with the mail centres. There is an agreement with the Labour Court and it is envisioned that one mail centre will close. I would much prefer that a mail centre did not close and that we develop other services. One of the things we are doing separately to what we are talking about today is looking at the strategy for adjacent industries. With the post office network, that is banking. With regard to mails and parcels, it is fulfilment. Major fulfilment centres could open up. We have considered whether we could do something like a pick-and-pack warehouse and how we could deliver Amazon or Alibaba products in Ireland. They are discussions we want to have. We would love to see that. I would much prefer a mail centre became that but we have four mail centres. The Deputy is absolutely right; Portlaoise is a great facility. They are all great facilities and they were all improved dramatically before I went to An Post. We have a very high next day delivery service and it is something we are proud of. Getting the configuration right is something we need to manage.

Deputy Lowry said he is frustrated by the reports and research. I am frustrated as hell. I really want to get on with this and we have to get on and complete these talks with the IPU, make sure we get the shape of the network right and make sure we move forward. I want to do that very fast. We have sorted out the centre of the company. We now need to work with postmasters so I can share their frustration and we can deliver.

I have talked about the €30 million. It will be spent. Has the price increase been counterproductive? I am saying "No", but inevitably there is an impact. The Deputy is quite correct.

The Deputy asked why the policy was for staff to leave on 1 December. We have no choice but to reduce our head count to maintain viability. All the partners recognise that whether it is the unions, An Post or the Government. It was due to be earlier but these things take time. The date of 1 December is not ideal but we can cope with the volumes of mail. I am delighted they are staying until 31 December. It is important for those who will be leaving the organisation. They will be working through the Christmas period.

I have answered the question on where we are with regard to the IPU negotiations. The plan not being communicated is a very fair criticism. We are just at the point now where we have completed it and we know what it is we want to do. Only last week, the top 40 managers in An Post came together to say we should make sure we get that communication right. It is a very reasonable criticism and we need to get it out there.