Shane Ross (Independent)

I raise this issue as a result of the appalling state of An Post and its delivery services. The Government should give an immediate commitment to the date for the liberalisation of postal services.

It has come to my attention that at least one company is staying out of the postal services market because of the situation with An Post and its lack of confidence in the ability of the Minister to provide a firm declaration that the postal services will be liberalised on 1 January 2009, as is expected but not confirmed. I ask the Minister of State to provide that confirmation. The company to which I refer, DX Ireland, is authorised by ComReg to provide postal services in Ireland. However, it will not enter the postal market until it is assured that it will be able to compete on a level playing field with An Post.

There are certain reasons companies proposing to enter the market feel that An Post has certain advantages with which it cannot compete. They are not operating on a level playing field and fair competition does not exist. An Post is a dinosaur — a monopoly which should be hewn down so that other players can gain entry to the market.

I will briefly outline the problems with which new entrants to the market are confronted. The first is that only 40% to 50% of the postal services are open to competition. This is particularly noticeable in the area of weight where An Post has a particular advantage over any entrants into the market.

The second difficulty is that uniform pricing for An Post, which everybody believes exists, is a myth. The statutory instrument covering the activities of An Post — which was signed by the Minister — states that An Post can do deals with individual customers. In other words, it does not have to insist upon uniform pricing in all circumstances. For new entrants coming to the market this means a monopoly like An Post can not just compete with them on product, but can introduce and indulge itself in predatory pricing, undercutting the new competitor and thereby putting it out of business. It can behave like a vulture in a really monopolistic way. Below cost selling is a trick that it could get up to.

The third reason why new entrants, and DX Ireland in particular, will not come into the market unless a firm and convincing commitment is given, is that the High Court may, on the application of An Post, prohibit other entrants from this market. This should not be on an application from An Post — it should surely be done on the application of ComReg. This particular clause allows An Post to abuse a monopoly position. The other advantage it gives to such a large State monopoly with deep pockets is that it can delay the small company from going into business for so long that it will never be able to compete. Indeed it might even go beyond the 2009 deadline when it can compete if the Minister were to give us this commitment.

The other reason competition should be introduced is the utter incompetence of the Irish postal service. The latest figures from ComReg suggest that only 74% of mail is delivered the next day. This is a 2% decline on the previous quarter, and shows a consistent trend of decline in efficiency by An Post over the last four quarters. An Post is falling well short of its targets. In its last quarterly report, ComReg said it was disappointed that An Post was not meeting any targets.

My final point relates to the treatment of VAT, where An Post does not charge VAT but where, in certain circumstances, new entrants must charge it. This is utterly unfair. It is a really serious deterrent and must be ended by Government statutory instrument or order as soon as possible.