Mary Hanafin (Dún Laoghaire, Fianna Fail)

I propose to take Questions Nos. 83 and 89 together.

In 1992, my Department and An Post entered into a five-year contract for the delivery of payments. This contract was renewed in 1997 for a further three years to the end of 1999. The award of a further extension of the contract in 2000 became subject to complaints to the European Commission under competition and procurement law.

On 13 November 2007, the European Court of Justice ruled in Ireland's favour. However, this was on the basis of lack of proofs by the Commission rather than on legal principle. The judgment also indicated that the services which fall under Directive 18/2004/EC, Annex ll B, must be subject to advertising if they may be of interest to undertakings within the member state concerned or in other member states.

Legal advice on the judgment is being reviewed within my Department. In the meantime, the current arrangements with An Post for the delivery of social welfare payments remain in place. The procurement of supplies and services by public bodies is governed by EU procurement directives and by national public procurement policy, as enunciated in guidelines issued by the Department of Finance. In broad terms, public procurement policy is aimed at ensuring that the taxpayer obtains value for money and that the public procurement function is discharged honestly and fairly. Therefore, placing a contract directly with An Post without a competitive process would contravene EU and national procurement rules and could result in further legal action against the State.

With regard to the operation of the post office network and the location of post offices, this is a matter for the board of An Post which comes under the remit of the Department of Communications, Energy and Natural Resources. An Post and my Department have been partners in the delivery of social welfare payment services since the foundation of the State and there is every reason to believe that An Post and the network of post offices will continue to play a significant role in the delivery of social welfare payments in the future.

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