Bernard Durkan (Kildare North, Fine Gael)
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Question 114: To ask the Minister for Communications, Marine and Natural Resources the position regarding developments in An Post; if he has issued directions to the management with a view to ensuring continuity of service and finalisation of a development plan for the industry; and if he will make a statement on the matter. [28034/05]

Noel Dempsey (Meath, Fianna Fail)
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The development and continued viability of An Post and the post office network, is in the first instance, a matter for the board and management of An Post. I believe that there will continue to be a key national role for An Post, both in delivery of mails and as a quality service provider through its nationwide network of post office outlets. The market for traditional postal and post office services is changing globally and meeting customer needs has become more important than ever. In order to remain competitive, An Post needs to make the best possible use of its long established and trusted brand name and deploy its resources in a manner which continues to serve existing customers' needs and attracts additional customers for a range of new services.

There is 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. With this in mind, the board and management of An Post have presented a recovery plan, incorporating details of proposed new collection and delivery arrangements, which I believe is vital to the re-establishment of the company on a more secure financial footing. The plan has assumed significant changes in work practices, tariff increases and the payment of wage increases. It sets out the way forward for the company. Adoption of restructuring that delivers real change is the only way that An Post workers can look forward to receiving pay increases in line with other sectors. To this end, I have continuously emphasised the need for all stakeholders in the company to work together in a partnership approach and to utilise the industrial relations mechanisms of the State, where necessary, in order to agree and implement the recovery strategy to return the company to financial stability and prepare for the challenges ahead.

In order to progress the change agenda, an exhaustive process of negotiation between An Post management and An Post trades unions, under the auspices of the Labour Relations Commission and then the Labour Court, was entered into. This process was recently concluded with the court's recommendation that the company accept the proposals as set out by a three-person expert group on the proposed new collection and delivery arrangements. The court also recommended that acceptance of the productivity agreement was contingent on the balance of increases being paid out under the Sustaining Progress agreement. It is my understanding, however, that, on 5 September 2005, the Labour Court's recommendations were rejected by the main union in An Post, the Communications Workers Union. A three-week cooling off period has followed in which every effort was made by the parties to resolve the issues. I understand that, following a special delegate conference, the union has now decided to ballot its membership for industrial action up to and including strike action. The ballot will be concluded by Friday, 21 October.

With regard to the future of the post office network, the Government and the board of An Post are committed to the objective of securing a viable and sustainable nationwide post office network as set out in the programme for Government. Notwithstanding the commercial remit of An Post, there is clear Government recognition of the social benefits of maintaining the nationwide post office network. Accordingly, An Post development strategies for the network continue to take full account of these social benefits.

As a commercial company, the challenge ahead for An Post is to develop a strategy that satisfies the needs of existing customers, while attracting new customers into the post office. An Post has already had some success in winning new business and continues to benefit from a considerable amount of Government business, especially in the areas of social welfare payments and savings products. In addition, a pilot project is under way which involves the automation of ten small post offices.

In light of the need to ensure the long-term viability of the network, An Post is working on a new initiative which would see the development of An Post financial services. Its aim is to supply a wide range of retail financial services through the branch network. If successful, it could lead to a significant increase in post office business.