Fergal Browne (Fine Gael)

I thank Senator Ross for raising this issue. Minister Dempsey regrets that he is unable to be in the House this evening to address the Senator on this matter.

The Government recognises the critical importance of having nationwide, reliable, high quality and efficient postal services. However, we must recognise that the challenges facing the postal sector now at the start of the 21st century are not the same challenges that faced us at the start of the 20th century, or even those we faced at the end of that century.

The economy and society at large also need strong and vibrant postal services in light of the many internationally traded sectors operating in the country. It also needs An Post to be competitive. There is universal agreement that change is required if the postal services of An Post are to adapt to the modern business environment and to continue to offer a top class nationwide delivery service to the customer into the future.

The Government also believes that liberalisation and the expected increase in competition ultimately will be good for both An Post and consumers. Like all businesses, if An Post is to prosper and grow, then it must adapt to the demands of its customers and place delivery of quality services to its customers as its primary focus and objective.

An Post operates within a regulatory framework as enshrined in EU law in European Directives 97/67/EC and 2002/39/EC. These directives set out the requirements for member states regarding the provision of high quality postal services. Both of these directives have been transposed into Irish law in Statutory Instrument 616 of 2002 European Communities (Postal Services) Regulations. Furthermore, the directives also provide for the liberalisation of the postal market.

Competition has arrived in the postal sector in Ireland and will intensify in the coming years. Currently, there are 29 firms with a postal service authorisation from ComReg operating in Ireland. Outbound international mail was fully liberalised on 1 January 2004. The parcels business is liberalised, with major international players operating in the Irish market. An Post now holds only 25% of the parcels market in this country. The weight limit applying to postal items falling within the reserved area and therefore not open to competition was reduced to 100g in 2003 with a price limit of three times the basic tariff for domestic and inbound international. The reserved area was further reduced to mail weighing 50g or less and two and a half times the basic tariff from 2006 for domestic and inbound international.

The current postal directive will expire on 31 December 2008 and it is expected that any new postal directive will be adopted by 2007. As provided for in the current postal directive, a study was recently undertaken by the EU on the impact on the universal service of the full accomplishment of a liberalised postal market. Based on the outcome of this study, the Commission will present a report to the European Parliament and Council by 31 December 2006 accompanied by a proposal confirming, if appropriate, the date of 2009 for the full liberalisation of the postal market or to determine alternative steps in light of the study's conclusions.

The Government has no plans at this stage to bring forward the date of further liberalisation of the remaining postal services that are currently exempt from competition. Issues that will be important for Ireland in the context of this new postal directive will include the protection of the universal service in a liberalised market, ensuring that Irish citizens continue to receive a broad suite of postal services; the development of a postal market so that new competitively-priced products and services are available to customers and; the continued viability of An Post in the face of open competition along with the necessity to safeguard against big players coming in and cherry picking at the expense of the less commercially attractive parts of the country. Any proposed postal directive and changes to the universal service will, of course, be subject to Oireachtas scrutiny.

Irish consumers deserve a quality of service comparable to that received by consumers anywhere else in Europe. A quality postal service is important in the context of a modern competitive economy like Ireland's. The way forward for our postal services is to ensure we have, on the one hand, adequate competition and, on the other, no diminution of the universal service. 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.