Vol. 512 No. 3
35 Mr. Yates asked the Minister for Public Enterprise if she will clarify her recent comments on the future of An Post; if it is the Government's intention to seek a partner; and the strategy she will pursue for the future ownership of the company. [25945/99]
Competition and consolidation in the postal market and new technology are driving change at a rapid pace across the EU. Combined with the spread of communications technology and the development of e-commerce, this creates an imperative for An Post to redefine and reorganise itself over the next two years.
Last week the Government accepted my pro posals on the need for the company to engage in a radical transformation process. The Government has agreed that part of this transformation will involve a strategic alliance with one of the major European operators and agreement to early liberalisation of the postal market. The Government has also given the go-ahead for negotiations on an employee share ownership scheme which will be part of the transformation. I have asked the company to consider the various options on a strategic partnership and to put proposals to me at an early date.
As was reiterated in the recent White Paper on Rural Development, the Government remains committed to the retention of the post office network. I have asked the company to allocate £5 million from the proceeds of the sale of Postgem-Ireland on Line specifically to the upgrading of the rural sub-post office network. The company has agreed to my proposal and is currently considering the options for investment in the rural sub-post office network. Following receipt of proposals from An Post, the Government will finalise its consideration of the provision of some matching funding.
Has the Minister a timeframe for when An Post will return to her and when she will take the matter back to Cabinet? Does she see the proposed strategic alliance as a commercial arrangement or would it involve the sale of equity? If it did involve the sale of equity – the proposal concerning Aer Rianta is to sell 30% – would she see that in all circumstances the State would retain 51% or a majority stakeholding in view of the very important rural and social services which An Post, uniquely, provides?
Management and the unions in An Post came to me and my officials saying they needed to address this matter, otherwise they would be overwhelmed by the force of change in postal services throughout Europe. I do not have a timeframe but I will communicate with the Deputy on this matter. No timeframe was set down as they came to us with force and urgency and we agreed to move forward.
I am not in favour of equity in terms of a partner. Neither am I in favour of privatising any part of An Post. I note the UK balked at such a position, but a report in The Guardian last Saturday said that 800 rural post offices would be closed in the UK. The report spoke about the devastating effect this would have on the rural landscape. I do not deny that the PricewaterhouseCoopers report on An Post which was completed some years ago decided that a number of rural post offices should close. I am not in favour of doing that. An Post still has hankerings in that regard, but the Government is not in favour of doing so.
A partner could bring expertise or markets. Once equity is given, influence is brought to bear on the company far beyond the worth of the money provided. I agree that An Post is not like any other semi-State company. It is very intimate and widespread and it affects everybody in the country who receives mail or uses the services of the post office.
Commercially An Post lives on the edge. It does not make big money, it just breaks even. Something will have to be done to get it into the slipstream of more technology and better working practices etc. That is the road which is now being embarked upon.
In her statement of 30 November and again today the Minister used the term "radical transformation process". I understand what she means by this, but this is a very labour-intensive business employing 8,500 people, who often interpret the phrase to mean wholesale job losses, be they voluntary or otherwise. The Minister will recall that in relation to Telecom Éireann there was an assessment regarding the numbers of jobs which would go. Does the Minister's Department have a view on jobs and job security? Can she give the staff some comfort in relation to their future job security given that, subsequent to the PricewaterhouseCoopers report of 1996, seismic reorganisation is already taking place? Can she allay the fears of staff that there will not be further job cuts?
The Minister must be brief.
The unions tell me they are about to start talking to management in a full way. That process is only beginning so how can I lay out anything about numbers? I hope I will not have to do that. They are only beginning that process and radical transformation is needed. It is a case of whether An Post can survive, and I believe it can survive.
