Frank Fahey (Galway West, Fianna Fail)

I am responding in this debate on behalf of the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey.

The future development of An Post is, in the first instance, a matter for the board and management of An Post. The Government is fully committed to An Post remaining a strong player in the Irish postal market but the market will change over the coming years. The Government recognises the invaluable contribution made by An Post and its staff down through the years. It recognises the contribution of An Post to the overall business environment and it also accepts the role played by rural post offices and the staff of An Post, especially in rural areas, in contributing to the social fabric of rural society.

On the future of the postal services, I believe that An Post will continue to play a key national role. It will continue to deliver post and provide Government and financial services through its nationwide network of post office outlets. The market for traditional postal and post office services is changing globally. Meeting customer needs has become more important than ever and international forecasts now predict that these challenges are likely to grow in intensity and complexity over the coming years.

To remain competitive, An Post needs to build on its long established and trusted brand name. It also needs to deploy its resources in a manner which continues to serve existing customers' needs and attracts additional customers for a range of new services. There is also widespread agreement that change is required if the postal services of An Post are to adapt to the modern business environment and to offer a high quality nationwide delivery service to the customer into the future. An Post management and the main trade union, the Communications Workers Union, have recently signed up to a recovery plan, incorporating details of proposed new collection and delivery arrangements, which the Government believes will assist the company in meeting the challenges of an increasingly competitive and technologically changing postal market. Other unions had already signed up to changes.

The challenge for An Post concerning the post office network is to develop a strategy that satisfies the needs of existing customers, while attracting new customers into post offices. An Post has already had some success in winning new business and continues to benefit from a considerable amount of Government business, especially in the areas of social welfare payments and savings products.

The network of An Post comprises the single largest number of retail outlets in the country. Ireland has one of the highest number of post offices per head of population in Europe. In recent years, some network restructuring has been undertaken in line with similar trends across Europe. In addition to the post office network, An Post has also established 2,864 Postpoint outlets in retail premises of which 600 can be used for bill payment.

It is the Government's objective to maintain the largest economically sustainable post office network possible. The challenge for all stakeholders in An Post is to generate sufficient profitable business to maintain as large a network as is sustainable. The network has a high footfall and to capitalise on these advantages, it is essential that existing and new services are developed to meet customer requirements. The network also has the capacity and potential to deliver more private business, especially in financial services. Opportunities in this area are being pursued by An Post.

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. At present 95% of An Post's business is conducted through its 991 automated offices.

The Minister has also asked the company to ensure that any strategy for its development should ensure the long-term viability of the post office network. An Post is working on a new financial services initiative. This could see the development and expansion of the range of financial services that it can deliver through its network of post offices in partnership with another financial services partner. Following recent Government approval, the management of the company has begun detailed exclusive negotiations with its preferred partner. If the initiative proves to be successful, it could lead to a significant increase in post office business and contribute to the viability of the network.

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