Bernard Durkan (Kildare North, Fine Gael)
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Question 69: To ask the Minister for Communications, Marine and Natural Resources his preferred options for the provision of postal services in the future with particular reference to the role or extended role he sees for An Post, the inclusion of a PSO, the need to ensure a fast, efficient and cost-effective letter and parcel delivery service in all areas throughout the country without exception and the need to comply with regulatory and competition rules; his views on the optimum number of post offices required; his intentions for the upgrading of the maximum number of post offices with a view to delivery of a wider and first class service to the consumer; if he has given instructions to the regulator or An Post with a view to achieving these objectives; and if he will make a statement on the matter. [39110/06]

Noel Dempsey (Meath, Fianna Fail)
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An Post operates within a regulatory framework as enshrined in EU and Irish law and therefore, the universal service obligation, which includes nationwide postal delivery requirements, is a statutory requirement for An Post as the designated universal service provider. To assist the company in meeting this obligation, it has a legal monopoly on all mail items weighing 50 g or less until January 2009.

Compliance with regulatory and competition rules is a matter for the board and management of An Post. Furthermore, ComReg, as the national regulatory authority, is required to monitor An Post's adherence to postal regulations. I have not given any recent directions to the regulator or the company in the above regard.

I believe there will continue to be a key national role for An Post in the delivery of mails and parcels. However, over the coming years, competition can be expected to increase in these sectors, whether from the privately owned express sector, from the large European public operators now looking for international business or from electronic substitution.

Liberalisation of the mail market in Ireland has already commenced and the second postal directive proposes that the postal sector fully liberalise across the EU on 1 January 2009 subject to political agreement which, if achieved, would open up the letter post area to full competition.

Issues that will be important for Ireland in the context of a fully liberalised market will include the protection of the universal service, ensuring that Irish citizens continue to receive a broad suite of postal services and the continued viability of An Post in the face of open competition.

The development of the postal market requires the availability of competitive, high quality products. The current level of market opening has introduced new players with offerings that meet consumer needs and further market opening will provide further opportunities for new and existing players. The development of further competition allied with a modernised and customer focused An Post will provide the basis for the further development of the postal sector here.

As regards the post office network, the precise number of post offices is a matter, in the first instance, for the board and management of the company. However, the Government and the board of An Post are committed to the objective of securing and maintaining the largest, most economically sustainable nationwide post office network possible. In line with this objective and with the need for the company to leverage its competitive advantages, I 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.

It was to this end that the Government recently gave its approval for An Post to enter into a joint venture agreement with the Belgian bank, Fortis, to set up a retail banking business. This will entail the provision of a range of financial services operated through the post office branch network, using the An Post brand and other An Post assets. Key to the Government approval of this joint venture was that it not only offers a real opportunity for the growth and development of An Post and the post office network but it will, in time, greatly benefit the income streams of postmasters.

Bernard Durkan (Kildare North, Fine Gael)
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Is it true that it is intended to use An Post for the banking or transmission of money transfers in the future? Would this apply, for example, to the Department of Social and Family Affairs which has advised that it will use banking systems in the future as opposed to postal services? Has the Minister given any thought to the optimum number of post offices likely to be retained throughout the country, notwithstanding the views expressed by the commissioner for communications and given that this country is somewhat different in terrain from most other member states? Is it intended to attach further compatible responsibilities to the postal service with a view to enhancing the viability of An Post? Will the Minister speak about the necessity for political approval of the structures to be followed in the provision of postal services in the future, having particular regard to the fact that it is an EU requirement that political agreement be reached?

Noel Dempsey (Meath, Fianna Fail)
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The deal between Fortis, the Belgian bank, and An Post will open the use of the postal network for financial services generally, such as insurance and so forth, as well as banking. That will operate throughout the post office network. Obviously, the post offices that are already computerised and electronically enabled will be in a position to do that straight away. Not all post offices will carry the full range of services but all of them will act as agents for the new company set up by An Post and Fortis. The answer to the Deputy's first question is that there will be a full suite of financial services, in the broadest sense, available in the local post office from early next year.

As part of that deal Fortis has agreed to enhance the capability of some post offices in the network to operate the electronic transfer systems. A large proportion of post offices have that capability at present but upgrades will be required due to the new systems. That will facilitate social welfare direct electronic transfers. In the negotiations that were carried out with the bank we told An Post that it must be mindful of the needs of the Department of Social and Family Affairs as well.

I have not formed a view on the optimum number of post offices. That is a matter for the board of An Post. It is true that we have a more scattered population, which is the reason we have so many post offices. Nevertheless, the number of post offices in this country is far higher than is the case anywhere else in Europe.

With regard to new services, the deal with Fortis will mean that a suite of financial services will be provided by post offices. The Government is constantly examining the possibility of new services being provided through the post office network. Some years ago I provided in legislation that something such as the register of electors could be compiled through the post office network.

Tommy Broughan (Dublin North East, Labour)
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The Minister, Deputy Roche, did not listen.

Noel Dempsey (Meath, Fianna Fail)
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That is a useful task it could undertake in the future.