Post offices have always been the main outlet for delivery of social welfare pensions, allowances and other payments and delivery of these payments constitutes a very significant part of the business of local post offices. There is a contractual relationship in place between my Department and An Post for the delivery of this service. The present contract between my Department and An Post will reach its end at the end of this year.
Following detailed consideration of this matter the Government has decided that the term of this contract should be extended for a further three years up to the end of 2002. This decision was made having regard to the needs of social welfare customers, the working relationship with An Post over the years and the Government's wish to con tinue to use the post office network as the principal outlet for payment of social welfare pensions and other payments. In the light of the Government decision my Department entered into negotiations with An Post on the terms and conditions which would apply during the period of the extension. In the normal course these negotiations would take some time to complete in view of the size and nature of the contractual relationship and of the need to accommodate any additional requirements in the area of service to my Department's customers.
The new contract must also comply with the requirements of EU legislation on the procurement of services of this kind and the Government was cognisant of these requirements in making its decision. Following the decision a third party with an interest in the area of payments and payment systems raised certain legal issues regarding the extension of the contract with the EU Commission. In accordance with standard procedures in these cases, the Commission has referred the issues raised to the Government for response and my Department is dealing with this. The issues raised are complex and require detailed examination and a response to the Commission will be forwarded by the end of this month.
Clearly it would be inappropriate to finalise a new contract while the issues raised with the Commission are still under examination. The necessity to address these issues and not to prejudice the potential interests of other parties requires that no new contract be signed until the matters raised have been resolved. As soon as these issues have been resolved the negotiations will be resumed with a view to having a new contract in place at the earliest possible date. Pending finalisation of these issues, social welfare payments will be delivered, as before, in the normal way.