Brendan Kenneally (Fianna Fail)

I am happy to contribute to this debate this afternoon. I have received representations from people in County Waterford about the diminished and unsatisfactory nature of the service provided by An Post. I have a great deal of sympathy for the staff of An Post because they have been given a raw deal, almost from the time the new body was established. It is no secret that the new body has been managed badly. Morale has deteriorated steadily almost from the outset and there is little incentive for the staff to try to improve the service.

The record of management since the break-up of the old Department of Posts and Telegraphs is dismal, to put it kindly. The sense of urgency, loyalty and dedication among staff seems to have disappeared. That, along with poor management decisions, has left the service in a lame duck position. An Post has been marked by years of mismanagement, dreadful public relations practices and bad business decisions. Senator Finucane referred to the relatively recent decision to purchase 500,000 roadside boxes without the necessary approval of the regulator to install them. The plan foundered when it was pointed out that the regulator's approval was necessary. Not only did it cost the company money, but it gave a bad impression of the business to everyone.

Radical changes must be made in An Post as it cannot continue the way it is going. It had an operational loss in 2003 of £43 million, which is totally unacceptable and unnecessary. The loss is an indictment of the company because postal services throughout Europe are making profits. While we have to take into account our relatively small population and the dispersed nature of the people in the most remote corners of the country, such a deficit is not acceptable or justifiable. I agree with the chief executive of An Post, who told the Joint Committee on Communications, the Marine and Natural Resources last January:

The maintenance of the universal service obligation inevitably imposes additional costs on postal services. Parcel services are subjected to increasing competition from a wide variety of sources. Crucially, there is growing competition from operators which are not subject to the USO.

I realise the burden this places on the company and that a postal service is, by its very nature, a labour-intensive industry. Having said that, it would still be difficult for any company to lose more than €750,000 every week.

The former chief executive's forecast for the balance sheet for 2003 was as follows:

In 2003 we will start the process of turning the corner and we might explore the assumptions on which we turn that corner. Our operating loss will be a shade above break even at plus €1 million.

It turned out to be a loss of over €40 million. It seems incomprehensible that any chief executive on top of his or her job could get it so wrong. I will not comment further on former management. Suffice it to say that we have staggered from bad years to worse years. Although it was promised that there would be realistic improvement, nothing came of this promise.

Mr. Curtin said the following in his submission to the Joint Committee on Communications, Marine and Natural Resources 12 months ago:

Our customer standards must be raised. To do that, we must develop a culture of customer service to compete in the market. We will need to improve our service level performance on our next day deliveries. Moreover, we need to monitor and reduce queues in the post office business, which is a source of potential growth within our business. Next year, we will introduce a customer charter which will include financial penalties for An Post where there are verifiable service deficiencies.

I look forward to an update from Mr. Curtin on what progress has been made on these aspirations.

Public confidence and morale in the service are at an all-time low and the service that is being delivered continues to be dismal and undependable. A constituent of mine summed this up recently when he said that, 40 years ago, a letter posted in the General Post Office in Dublin and date-stamped in the early hours of the morning would be delivered before 9 a.m. on the same day to a town over 100 miles away. Moreover, it could be depended upon to arrive on time. Last year, the same constituent had the experience of having a letter take 17 days to travel 80 miles to Limerick. Can the chief executive reconcile this with his statement last year that "we will need to improve our service level performance on our next day deliveries"? Such reconciliation has not occurred. I can readily understand that a percentage of post could be a day or two late, but it is incomprehensible and totally unacceptable that it could be 17 days late, or any number of days close to that duration. My post from Leinster House has regularly taken from Thursday to the following Tuesday to arrive in Dungarvan, Waterford. That is also unacceptable and an indictment of the service.

There needs to be a greater sense of realism in An Post and the sooner the company realises that the end of the line is near if it does not get its act together, the better. Most of the family silver is already disposed of to keep the company afloat and it has been made abundantly clear that the Government will not bail it out in the future. Neither will the public have any sympathy with it as public patience ran out a long time ago. It is to be regretted that instead of concentrating its every effort on rationalisation and good business practice, the easier method of selling off premises was the favoured course. We are told that anything saleable is now gone and that a new source of funds is required. We must be realistic and recognise that banks and businesses will not advance money to an ailing company with a record loss of €43 million in one year. The company will have to take hard decisions, develop its business and learn to stand on its own financial feet.

The chief executive stated the following during his appearance at the Joint Committee on Communications, Marine and Natural Resources on 8 January last year:

It is not only the management team's view but my own personal view that such a programme of change cannot and should not be achieved by means other than through negotiations and by agreement. It is a fundamental change to the long-term health of the company and I believe it can only be done through the consensus of the management and the workforce.

We noted at the committee meeting yesterday that this is certainly not happening. The management and workforce seem to be moving further apart. I wonder how Mr. Curtin can reconcile that statement with the SDS debacle of recent weeks. Management will have to do better to convince the workforce, the unions and the public that the company is serious about tackling its many problems on a united front with all the stakeholders involved. There needs to be agreement on the re-integration of the SDS business into the day-to-day business of the company. I realise it may only represent 10% of the company's business, but it also represents 33% of the losses. I am not convinced that the way forward is to ditch SDS just because it is not making money at present. An Post should hold onto every element of its business, make each one financially viable and serve the public it was set up to serve. However, it must be done in a spirit of co-operation and agreement with staff, which is not evident at present.

The company will have to do much better in the area of industrial relations. Much of what we have seen in regard to the SDS debacle would hardly inspire confidence. Without going too deeply into the rights and wrongs of the recent industrial dispute, one must note that it is essential that industrial harmony be made one of the priorities. Overnight notification of changes of work location for employees is at best unwise and at worst a guaranteed recipe for disaster. It is to be hoped that management learned something from the industrial relations and public relations disaster of recent weeks.

I was pleased to hear the chief executive assure the committee yesterday that the company is on the verge of making a profit. Even if this only amounts to the anticipated €1 million per annum, at least it will be a major step in the right direction. There seems to have been little sense of realism in An Post over the past two decades or so. There was no realistic effort to develop the business and even the arrival of the much-vaunted electronic mail does not seem to have rung the warning bells. Instead of meeting the challenge head-on and adopting an aggressive and proactive approach, management was content to sit back, dig into reserves to make ends meet and, in recent times, sell property just to pay the wage bill.

There was little evidence of aggressive marketing on television, for instance. With the exception of the Christmas snowman campaign, which has been running for many years, there seemed to be little evidence of any new initiatives or efforts to sell the strong points of the service. One will recall the postal competitions that were a feature of the "Late Late Show" under Gay Byrne, which generated 500,000 postcards every time a car, exotic holiday or other attractive prize was offered. I know that such competitions are still a feature of the "Late Late Show".

There are other avenues which could also be explored. There should be no shortage of partners in the media who could derive value from such campaigns, generating a considerable postal response with consequent benefits in revenue. Junk mail was never more plentiful than it is at present and incentives could be given to those companies involved which wish to promote their products and services. Everyone has a birthday and birthday cards are still a very personal way of sending greetings. This practice could be developed and expanded upon. St. Patrick's Day is celebrated in a unique way in Ireland and there are enough Irish expatriates and people of Irish descent abroad to justify a promotional campaign in this regard. There was a very successful write-and-invite campaign some years ago which had the benefit of generating postal revenue and afforded the possibility of attracting visitors to Ireland. Such a campaign may not be successful or seem to be worthwhile commercially, but every opportunity to generate an honest euro should be availed of. That is what people in private business do if they want to grow their business and make money.

Given its network of offices around the country, An Post is in a position to pick up some of the business that the banks seem to be shying away from at present. Banks do not seem to want customers to enter their offices and would prefer them to do their business remotely by electronic means. With proper identification and development of services, there is an opportunity for An Post to become the small person's bank. There has been a precedent for limited co-operation with AIB since 2002 but there is ample scope for further co-operation of this nature. There are many other opportunities to be availed of outside the postal service per se, one of which might be to provide motor tax facilities. This was examined in the past, but with little enthusiasm on the part of the licensing authorities. However, with immediate electronic access to files there is no reason An Post could not supply the service.

It is vital that the post offices be kept open in rural areas. Too many post offices have closed already and the Garda stations are long gone. However, we should fight to maintain the post offices we have left. In addition to the companies whose job it is to devise selling campaigns, there must be staff working at the coalface who have ideas for the expansion of the business. Have they ever been asked for their ideas? Are there tangible rewards and an incentive campaign to make their efforts worthwhile? I am not in the marketing business but there are opportunities which could profitably be tapped. There can be little scope left for staff reductions and there is no point reducing the workforce until expansion is no longer possible. Let the service be streamlined but do not make it a lame duck.

It is essential that An Post survive, thrive, serve the people and make a profit. This will not be easy to achieve but must be done because it is a vital service. Management primarily, and all stakeholders generally, must work to achieve that objective.