Pat Gallagher (Donegal South West, Fianna Fail)

I apologise to Deputies Broughan, Cowley and Durkan and other Members present on behalf of the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, who is unable to come before the House. I thank the Deputies for raising these important issues and giving me an opportunity to respond on behalf of the Minister.

The Government recognises the invaluable contribution made by An Post and its staff down through the years in terms of their input to the overall business climate and the role played by rural post offices and postmen in maintaining the social fabric of rural society. The strong contribution by An Post was possible in the context of a slow moving operational environment. However, the company has not been immune to the seismic changes in the communications sector. The move to e-mail and electronic fund transfers has impacted on postal volumes and post office users. To be relevant in the new environment, therefore, the company must modernise.

The basic building block for any company is financial stability and An Post has not yet met this basic requirement. As the Minister stated previously in the House, the company has suffered significant losses in recent years, starting with €6.7 million in 2001, rising to €17.4 million in 2002 before reaching an unsustainable level of €42.9 million in 2003. Between 2001 and 2002, payroll costs alone increased by €50 million. This financial performance, if allowed to continue unchecked, would have bankrupted the company.

An Post needs to introduce modern work practices if it is to thrive in a competitive environment. The company will face more rather than less competition in coming years and it needs to be geared to address this challenge. Large international companies such as Royal Mail and the German post office are already operating in the Irish market. If An Post cannot meet consumer needs and deliver a high quality of service, these companies will be more than happy to ramp up their operations here to fill the gap.

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