Noel Dempsey (Meath, Fianna Fail)

I propose to take Questions Nos. 118, 130, 180 and 188 together.

The development and continued viability of An Post and the post office network is, in the first instance, a matter for An Post's board and management. An Post will continue to have a key national role in the delivery of mail and as a quality service provider of Government and financial services through its nationwide network of post office outlets. As the market for traditional postal and post office services is changing throughout the world, it is more important than ever to meet customer needs. Globalisation, liberalisation and developments in technology are changing the way people communicate so it is important for national postal operators, including An Post, to change rapidly if they are to remain competitive and commercial in the European postal market. In that context, An Post needs to make the best possible use of its long established and trusted brand name, to deploy its resources in a manner that continues to serve existing customers' needs and attract additional customers for a range of new services.

It has been agreed that change is required if An Post's postal services are to adapt to the modern business environment and to continue to offer customers a top class nationwide delivery service. The board and management of An Post have prepared a recovery plan, incorporating details of proposed new collection and delivery arrangements, with that in mind. The plan is central to the re-establishment of the company on a more secure financial footing.

The Labour Court's recommendations on proposed new collection and delivery arrangements have been accepted following extensive negotiations between An Post's management and trade unions. This welcome development will pave the way for the full implementation of the change programme that is essential if the company is to be placed on a firm financial footing and to secure its future in an increasingly competitive and technologically changing market.

I would like to speak about the future of the post office network. The Government and the board of An Post are committed to continuing a viable and sustainable nationwide post office network, as set out in the programme for Government. Notwithstanding the commercial remit of An Post, the Government clearly recognises the social benefits of maintaining the nationwide post office network. An Post's development strategies for the network continue to take full account of such social benefits. As a commercial company, An Post is challenged with developing a strategy that satisfies the needs of existing customers and attracts new customers to the post office. It has had some success in winning new business and continues to benefit from a considerable amount of Government business, especially in areas like social welfare payments and savings products.

The An Post network comprises the single largest number of retail outlets in the country. Ireland has the largest number of post offices per head of population in Europe. Some network restructuring has been undertaken in recent years, in line with similar trends across Europe. In addition to the post office network, An Post has established 2,864 Postpoint outlets in retail premises, of which 600 can be used for full bill payment. The Government intends to maintain the largest economically sustainable post office network possible. The challenge for An Post's stakeholders is to generate sufficient profitable business to maintain the network at its current size. The Government will support the network in any way it can. It demonstrated that commitment in a tangible fashion by providing for a capital injection of €12.7 million in 2003. An Post needs to enhance its existing services and build on its existing strengths by developing new product offerings. If the network is to capitalise on the advantages it enjoys as a consequence of its high footfall, existing and new services should be developed to meet customer requirements.

The network also has the capacity and potential to deliver more private business especially in the financial services and opportunities are being actively pursued by An Post in this area. On foot of substantial investment in computerisation a significant amount of extra business has already been obtained for the network in terms of banking and utility business. Currently, 95% of An Post business is conducted through automated offices. I have also asked the company to ensure that any strategy for the development of the company should ensure the long-term viability of the post office network. In the light of this An Post is working on a new financial services initiative which could see the development and expansion of the range of financial services that it can deliver through its network of post offices. If this initiative proves to be successful it could lead to a significant increase in post office business and contribute to the enhanced viability of the network.

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