Damien English (Meath, Fine Gael)
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Question 118: To ask the Minister for Communications, Marine and Natural Resources the extent to which he will influence, direct or otherwise provide for the continued existence and expansion of the postal service including the network of post offices and sub-post offices in the future; and if he will make a statement on the matter. [2050/06]

Paul McGrath (Westmeath, Fine Gael)
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Question 130: To ask the Minister for Communications, Marine and Natural Resources his intentions in relation to the future development of An Post having particular regard to the need for the utilisation of the readily available network of post offices and sub-post offices; and if he will make a statement on the matter. [2042/06]

Tom Hayes (Tipperary South, Fine Gael)
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Question 180: To ask the Minister for Communications, Marine and Natural Resources the steps he has taken or proposes to take to ensure the continuity, viability and cost effectiveness of the postal service in the future; and if he will make a statement on the matter. [2045/06]

Jimmy Deenihan (Kerry North, Fine Gael)
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Question 188: To ask the Minister for Communications, Marine and Natural Resources the extent to which he has encouraged the redevelopment of An Post with a view to providing the widest possible modern services to the public; and if he will make a statement on the matter. [2051/06]

Noel Dempsey (Meath, Fianna Fail)
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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.

Bernard Durkan (Kildare North, Fine Gael)
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I compliment all concerned in the resolution of the dispute that ended in the acceptance of the Labour Court's recommendations which gave a new lease of life to the post office services. What efforts are being made to accelerate the degree to which the post office network can meet the ongoing and ever-increasing customer needs and provide new services? Will the Minister give an indication of the degree to which he expects the utilisation of the network in future given that its competitors and the domestic customer are willing to utilise those services? In regard to the downgrading of existing post offices to sub-post offices and the closure of some, which can have a fundamental impact on the whole structure of the network, will he give an indication that this will not be done to the extent that it will undermine the whole fabric of the network which is a valuable entity? Will he indicate whether other Departments, including the Department of Social and Family Affairs, will not only continue to utilise but increase their usage of An Post services? Some indication was given that parcel and packaging services might be restored. In view of the growth of private or independent packaging services is there a possibility of the restoration of services in that area?

Noel Dempsey (Meath, Fianna Fail)
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I am not aware of any plans to go back to an SDS type operation in respect of parcel post. That service was set up a few years ago and had to be closed quickly. The work on the closing of that service was completed only in the middle of last year. I am not aware of any decision to revert. I am aware An Post will aggressively market its parcel service through the normal post and is seeking to compete with private couriers for that end of the market. On the question of other Government services, at every available opportunity the Government is seeking to ensure that any services that can be provided through the post office network will be so provided. The most recent service is the fine paying system, on which agreement has been reached between the Department of Justice, Equality and Law Reform and the postal service. The Government made a decision some years ago to ensure, where possible, that each Department, in line with public procurement policies, would try to provide services through An Post to enhance the viability of the post office network.

On the issue of the post office network throughout the country, I mentioned in my reply that we still have the highest number of post offices per head of population of any country in Europe. I am aware that many people attended meetings of the IPU before Christmas. At those meetings even the IPU questioned whether we could sustain the post office network and the current number of post offices into the future. In light of its report and other issues it had with An Post I have asked Eamon Ryan to assist it in negotiating with An Post to try to enhance its position which in turn would enhance the post office network. I accept the Deputy's acknowledgment of the resolution of the dispute. Hopefully, we can move forward and that the remaining matters that need to be resolved, as part of the Labour Court decision, can be finalised.

Competition is increasing. An Post needs to modernise to adapt. I have no doubt with goodwill on all sides that can happen. If by 2009 An Post is not in a healthy state and able to compete with the best in the private sector it will have a major difficulty. I am confident it will adapt, accelerate the change process and will be in a healthy state at that time and able to withstand competition.

Tommy Broughan (Dublin North East, Labour)
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How many post offices have closed since the Minister came into office in the past 16 months? In view of what the Minister said about expanding the new financial services initiatives, how can that be delivered if post offices are closing month by month and the network is getting smaller, having been decimated since 1990? It plays a very important role in rural life. Everybody welcomes the resolution of the dispute. Part of the resolution, dating from when the Minister came to office, was that the Minister would bring forward the miscellaneous provisions Bill in respect of the ESOP provisions. Will the Minister bring back that legislation given that it was on the clár of the Dáil for years?

ComReg said only 71% of letters are delivered next day as against the target of 94%. Is the embargo on recruitment which An Post management implemented approximately 18 months ago still in force? It means that for several weeks in recent months towns such as Asbourne, in the Minister's constituency, have had no post.

Bernard Durkan (Kildare North, Fine Gael)
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It was terrible.

Tommy Broughan (Dublin North East, Labour)
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It was desperate. I understand the term of office of the chief executive of the management team of An Post, Mr. Curran, and his chief operations officer will come to an end this summer. Is it the Minister's intention to make changes to An Post management?

Noel Dempsey (Meath, Fianna Fail)
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The board of An Post is the body responsible for changes in management. I do not have any plans to interfere in that process and it would not be a healthy exercise. I am sure several Deputies would accuse me of creating jobs for the boys if I decided to do so.

Bernard Durkan (Kildare North, Fine Gael)
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We would never accuse the Minister of that.

Noel Dempsey (Meath, Fianna Fail)
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I will not interfere in that process. The Deputy is correct in saying the term of office of the chief executive ends in the middle of the year but, as I have said, that is a mater for the board. On the question about the embargo on recruitment, that is a matter for An Post but my understanding is that agreement has been reached. The Labour Court recommendation has been accepted by both sides but has not been implemented. A number of issues have to be worked out. Company management made a decision some time back that in order to keep An Post viable it would not recruit staff to fill in for people that were missing due to the high absentee rate in the An Post workforce on a continuous basis. It decided not to do anything in the area of recruitment until all issues were resolved, and to my knowledge that is how the matter stands.

I fully agree with Deputy Broughan about next day delivery. The levels are not satisfactory whether one goes by the ComReg or An Post figures. The levels are way short of what they should be, but I hope that once the new agreement and so on is fully in place these levels will increase. They must improve. We need the percentage of next day delivery to be in the mid-90s rather than the current low 70s.

I accept some post offices are closing but I do not have the figures off the top of my head. I cleared a written reply to a question from the Deputy in recent days on this matter and the figures will be available to him through that. We have the largest number of post offices per head of population of any country in Europe. The latest information I have is that there are 96 company offices, in the region of 1,400 sub-post offices and 160 postal agencies operating nationwide. Some 1,000 of these offices are automated. We have a very good spread. No part of Ireland is any more than 5 km from the nearest post office, Postpoint or postal agency. The question is whether we can sustain that into the future.

I am satisfied with the current levels of the network and would probably also be satisfied with lower levels. I am also satisfied that the proposed financial services initiative being taken by An Post, which is being negotiated with a number of tenderers, would be perfectly viable with the current network. I am sure those who are avidly competing for that An Post joint venture have taken all that into account and are satisfied.

Tommy Broughan (Dublin North East, Labour)
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What about the Bill?

Noel Dempsey (Meath, Fianna Fail)
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I withdrew the Bill because no ESOP was going to take place in the current circumstances. I hope we can resume with the Bill when the company gets back into profit, but I do not anticipate that will be done in the lifetime of this Government.

Pádraic McCormack (Galway West, Fine Gael)
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The Minister acknowledged that sub-post offices are closing. Does he realise that the reason this is happening is that when post masters or post mistresses retire it does not pay people to take up the job. In Connemara, the post office recently closed in Maam and I was at a meeting in Cashel last night, which is more than 5 km from any other post office, where the post office also closed. When small post offices close, people no longer wish to take up the job of post master or post mistress because it would not pay them to keep an office open for the small return they would get. Instead of the pay per item system operating in these sub-post offices, is it possible for An Post or the Minister to introduce a system of flat rate payment to post masters or post mistresses to keep post offices open in rural areas?

As the Minister has acknowledged, much of the work is now done in other ways. Television licences can be paid on-line and the post office is not required for such transactions but it is an essential part of the community. In view of the many social benefits attached to the post office referred to by the Minister, would it be possible to make a flat rate of payment to sub-postmasters and sub-post mistresses instead of a pay per item system?

On what was the €12.7 million referred to by the Minister spent? Was any of it spent in an endeavour to keep rural sub-post offices open? In Connemara the Maam and Cashel post offices have already closed and the post offices in Cornamona and Clonbur are in danger of being closed simply because when the post master or post mistress retires nobody will take on the job because on the current rate of pay it would not pay anybody to keep an office open.

Noel Dempsey (Meath, Fianna Fail)
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The €12.7 million that was paid out in 2003 was largely spent on automation of post offices, although there were other areas of expenditure.

Pádraic McCormack (Galway West, Fine Gael)
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On what was the money spent?

Noel Dempsey (Meath, Fianna Fail)
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On the automation of post offices in various parts of the country. The second question asked by the Deputy relates to a contractual matter between post masters and post mistresses, who are represented by the IPU, and An Post. I have had a number of discussions with the IPU in regard to contracts, rates of payment and so on and it put forward various proposals, but that is a matter between the union and An Post. For that reason I have engaged Eamon Ryan to work with the IPU and An Post to examine all the issues concerning post masters, levels of remuneration, contracts and so on to see if they can be improved. He has undertaken to do that work within a specified period of time.

The post masters have asked Farrell Grant Sparks to produce a report, which has been done, and this will be used as a basis for discussion between the parties. I agree with Deputy McCormack that a number of issues need to be resolved between An Post and post masters and post mistresses. If that can be achieved it would probably make the job more attractive to people and would help to maintain a strong nationwide service.

Automated post offices account for 95% of the business but I agree with the Deputy that the remaining 5% of post offices may be located in rural areas where, we should not forget, the social service element of An Post must be taken into account. The best way to ensure that we maintain the network is to make sure that An Post is a strong and viable company that can do the kind of business it needs to do.

Pádraic McCormack (Galway West, Fine Gael)
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Where did we get Eamon Ryan?

Eamon Ryan (Dublin South, Green Party)
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May I make a brief point of order?

Séamus Pattison (Carlow-Kilkenny, Labour)
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We only have time for one more question.

Eamon Ryan (Dublin South, Green Party)
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I will make the point of order after that.