John Browne (Wexford, Fianna Fail)

The challenge for the company is to develop a strategy that satisfies the needs of existing customers, while attracting new customers into the post office in order to maintain as large a network as is viable. Despite what has been said on the far side of the House, the Minister requested the company to develop a strategy for the long-term development of the post office network. In response to this request An Post examined options relating to the operation of a jointly owned entity termed An Post Financial Services, APFS, to supply a wide range of retail financial services through the post office network and other channels, using the An Post brand and other An Post assets.

Negotiations were concluded between An Post and Fortis in the summer and the Government approved the An Post board to proceed with the joint venture which it is anticipated will be launched in early 2007. Its launch will see the establishment of a full service retail bank which will be a separate legal entity to An Post and Fortis, in which both An Post and Fortis will have an equal shareholding; the introduction of a state-of-the-art banking IT platform — the joint venture will invest significant sums of money in upgrading the network in the next five years; the opportunity to diversify and increase the revenue streams for An Post and postmasters through commissions for the sale and servicing of products; the initial employment of approximately 250 people, which number will rise to 500 within five years; an enhancement of banking services in rural areas; and the introduction of additional competition to the banking sector. The primary delivery channel for product and services will be via the post office network, with An Post being appointed as sole provider of financial services.

This deal will result in real investment in the post office network and technology that should place An Post on a platform to continue to win more business and, in particular, higher value financial services and ensure An Post can compete for business on a level footing with other financial services institutions. The deal will enable the company to deliver the quality customer services now demanded by the public and also means that social welfare recipients will have more options on their preferred method of payment. We all regularly hear concerns about the future of our extensive rural post office network. This deal will result in investment in the network in both urban and rural areas at a time when many of the private sector financial institutes are withdrawing their facilities from many rural locations.

While the Government recognises that the joint venture will not be the panacea to all of the challenges facing An Post and its network, it is clearly the biggest development and opportunity to have presented itself in recent years. The alternative course of action of doing nothing is clearly not an option that anyone with the long-term interests of the post office network in mind would wish to pursue. There are few alternatives. It is in the interest of all parties that the joint venture with Fortis proves to be a success. It represents a real opportunity for the company to secure the viability of the post office network and its postmasters. It is, therefore, very disappointing that the Irish Postmasters Union has recently indicated that it does not intend to co-operate with it.

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