Topical Issue Debate

Rail Network

Deputy Martin Ferris

There is serious concern regarding the awarding of the contract for rail maintenance to a British company, Balfour Beatty, which has also been awarded the €400 million contract for maintenance of the Bord Gáis grid. The reason for this concern, other than the fact that jobs will be lost among Irish contractors, is the company's poor safety record.

Most of this record relates to incidents on the British railway system, including the derailing of a train on a section of line laid by the company. In 2006 Balfour Beatty was fined GB £7.5 million after a train crash which cost four lives and caused 100 injuries on a section of line maintained by the company. In 2007 it was fined GB £180,000 following the fatal electrocution of one of its line maintenance workers. The company also has a rather colourful history in terms of securing contracts. In 2008, for example, it was fined GB £2.25 million when the Serious Fraud Office found it guilty of false accounting. In 2009 it was fined GB £5.2 million by the Office of Fair Trading for corrupt practices in securing construction contracts.

In the light of all this, can the Minister or the public be satisfied that the railway system will be in safe hands? Surely the company's record ought to have been taken into consideration before these contracts were awarded? There is also the worrying development that all of the major contracts for such work within State companies are apparently being awarded to overseas companies. In this instance, the company in question has secured lucrative contracts with Bord Gáis and larnród Éireann, while the contract for line maintenance within the ESB is also being tendered abroad. How does this sit with the Government's target of creating indigenous employment? Irish companies and Irish workers will be considerably impacted by the loss of this work, despite having delivered such contracts to a consistently high standard over the years. That record stands in contrast to the standards of the company in question.

Will the Minister confirm the belief among Irish companies that there is an obligation on public bodies to seek tenders from within the EU? Given the state of the economy and the need to generate employment, there surely ought to be an obligation, particularly on the part of State companies, to ensure such contracts go to Irish companies, which have an established track record in this type of work. I am seriously concerned about awarding this contract to Balfour Beatty given its track record and appearances and convictions before the courts. From a security point of view, given its convictions for fraud and malpractice, this is a dangerous precedent for any Government to set.

Minister of State at the Department of the Environment, Community and Local Government (Deputy Fergus O’Dowd)

I am taking this matter on behalf of the Minister for Transport, Tourism and Sport, Deputy Varadkar, who is unavoidably absent. I thank Deputy Ferris for raising this issue. I was not aware until now of the information which the Deputy has just put into the public domain. Perhaps he will provide me with a copy of it.

As the Deputy will be aware, the Minister for Transport, Tourism and Sport, Deputy Varadkar, does not have an operational role in larnród Éireann nor does he make decisions on awarding of contracts by the company. This is a matter for larnród Éireann and its parent, CIE, in accordance with their procurement policies. The Minister understands from larnród Éireann that on 20 February 2010 a procurement process was advertised in the Official Journal of the European Union seeking expressions of interest from economic operators in a procurement competition intended to lead to the award of a contract to operate and maintain the On Track Machines, OTM, fleet. A procurement evaluation panel, which consisted of suitably qualified and experienced larnród Éireann infrastructure managers, determined which was the most economically advantageous tender having regard to the award criteria. On the basis of the decision of the procurement evaluation panel, approval from the board of larnród Éireann and the board of CIE was sought to conclude negotiations and to award a contract to the preferred bidder, in accordance with CIE Group procurement policies and procedures. The decision was approved by the board of larnród Éireann on 25 October 2011 and by the CIE board on 3 November 2011.

The participants in the tender process were advised on 9 November 2011 of the decision reached in regard to the award of contract, in accordance with the requirements of SI 131/2010 European Communities (Award of Contracts by Utility Undertakings) (Review Procedures) Regulations 2010. Under the Railway Safety Act 2005 and EU Directives, the Railway Safety Commission, RSC, is responsible for the regulation of railway safety in Ireland and ensures compliance with EU obligations. In accordance with provisions of the Act, the primary duty of care for the safety of the railways rests with the railway undertaking and its management and staff. On works on the railway, larnród Éireann ensures that all such operations comply with overall safety requirements and standards.

The Minister has been informed by the Railway Safety Commission that the activities of any OTM operator-maintainer, including movements over the larnród Éireann network between depot and work site, are subject to safety certification by it based on assessment and acceptance of a safety management system that fully complies with EU regulations.

Deputy Martin Ferris

I thank the Minister of State for his reply. I will forward the information I have to his office. I previously raised this matter in the House with the Minister, Deputy Varadkar, when I was sure all of this information was available. The Minister of State, Deputy O'Dowd, stated that the Minister for Transport, Tourism and Sport has no operational role in awarding contracts. In light of the information I brought to the House last week and again today, will the Government revisit contracts that have been awarded in terms of safety, including the colourful history of the company that secured this contract?

The company concerned was fined £7.5 million following a train crash on a section of line it had maintained, resulting in the loss of four lives and 100 injuries. It was also fined £2.2 million by the Serious Fraud Office and £5.2 million by the Office of Fair Trading for corrupt practices in securing construction contracts. This is worrying. I understand these convictions are on public record. I will forward the information to the Minister of State's office. I hope it will be looked at and that the Government will revisit the terms of contracts and will investigate whether this information was disclosed by the company concerned.

Many Irish companies with good track records in terms of safety and so on are unable to procure employment. Given the current economic climate here, with so many people unemployed and more people regularly joining the dole queues, there is an obligation on the Government and everyone else here to ensure that, where possible, there is positive discrimination of Irish companies.

Deputy Fergus O’Dowd

During my time as Opposition spokesperson on transport, CIE and Iarnród Éireann were regularly invited to committees to discuss issues like this. Following receipt of the information from Deputy Ferris, I will ensure it is given to the Minister and will ask that it be forwarded to the board of CIE. The key point is that the Minister for Transports, Tourism and Sport has no role in deciding where contacts are awarded. That is the function of the boards of CIE and Iarnród Éireann. The Deputy has rightly raised the question of whether they were aware of the facts outlined and if so, what implications, if any, this might have in terms of the legal awarding of the contract to the successful bidder.

Six expressions of interest were obtained from the initial advertisement. Following a pre-qualification process, four entities were invited to submit tenders. Three tender submissions were received. larnród Éireann determined that it wished to award a single contract encompassing operation and maintenance services. As one of the tender submissions related to maintenance services only, this tender was not considered for the purposes of awarding the contract. Following initial tender submissions in September 2010, the tender evaluation process entailed four rounds of discussions with the two companies competing for operation and maintenance of the contract. Negotiations in this regard concluded in September 2011.

The contract award criteria for the purposes of the tender evaluation comprised 65% cost, 30% methodology for provision of services under the contract and 5% start-up time. A procurement evaluation panel, which consisted of suitably qualified and experienced larnród Éireann infrastructure managers, determined which tender submitted the most economically advantageous tender having regard to the award criteria.

The issues the Deputy brought to my attention will be brought to the attention of the Minister, Deputy Varadkar, and the company concerned. I suggest to the Deputy that, as the Minister has no role in awarding contracts, he, as a member of the transport committee should, as a matter of urgency, ensure Iarnród Éireann is called to attend before that committee to urgently discuss these issues, at which point he can seek all information to which he is entitled.

The Railway Safety Commission is the regulator in this area. I have no doubt it will ensure that any activity carried out for and on behalf of Iarnród Éireann will meet all safety requirements.

Gas Exploration

Deputy Timmy Dooley

I welcome the Minister of State to the House. I also welcome this opportunity to discuss what I believe will be a critically important issue for the Government and country over the coming months, namely, fracking. This practise is causing fear and concern for citizens who live in areas identified as having potential for extraction of shale gas, one of which is in the Clare area and the other of which is in the Leitrim area. I will concentrate on the area with which I am familiar, which is the Clare area.

This practice is causing grave fear and concern for many people living in the Clare area. They have heard the stories from other countries of the devastation of fracking on communities, community life, groundwater and tourism potential. People in Clare - and, I am sure, throughout the country - have strong views on this issue. So strong are they that the local council has during the past two weeks commenced the process of ultimate banning of fracking in Clare and other areas.

Obviously, the democratic process has worked well at local level and it is incumbent on Members, within the confines of the Dáil, to act on the advice they have been given by local authorities such as Clare County Council. I call on the Minister of State to take on board the views and comments of those concerned, that is, the local elected representatives and those whom they seek to represent, to ensure no further licences, exploratory or otherwise, are issued; that no commercial activity is allowed to begin and that the Government moves at the earliest possible opportunity to implement a nationwide ban on the process of fracking.

While Members are the custodians of the land, in the great scheme of things they are only here for a relatively short time. It is vitally important that we not do anything to the nation and its lands that would render it completely redundant for future generations. They have a responsibility to protect the environment. The research I have undertaken indicates that the process of fracking would have a detrimental impact and effect on the areas concerned. West County Clare which is known as a beauty spot has a certain population density. It is of vital importance to protect the livelihoods of those who wish to reside in such an area. Were Members to turn it into a wasteland by allowing the process of fracking to be developed, they would be telling future generations they would be obliged to move away from the area. Ireland is a small island with a fair-sized population. It cannot afford to turn vast tracts of the countryside into wastelands.

The Government should move quickly in this regard, rather than giving the exploration companies which come here, albeit in an exploratory capacity initially, a potentially legitimate expectation. However, as the giving of a licence marks the first phase, the very fact that it is issued creates an expectation. Moreover, it is not good enough to state such companies must have an EPA licence or will be obliged to secure planning permission. Ireland should take a firm decision immediately that it is not in favour of onshore fracking. There is potential to find natural resources offshore in our seas, which is positive and on which we must follow through. However, a line should be drawn under onshore exploration through fracking at the earliest possible opportunity in order to prevent it from becoming an ongoing issue.

Deputy Fergus O’Dowd

I thank the Deputy for raising this issue in the Dáil and the Ceann Comhairle for selecting it. I agree with the Deputy that it is an important issue.

My Department has not received applications for or licensed the use of onshore hydraulic fracturing in Ireland. The earliest an application could be made is early 2013 and the earliest exploration drilling could be considered is 2014. The question for Ireland is not whether it should be declared a fracking free zone. Instead, we must be clear in our understanding of the potential implications of this technology before any project proposing its use can be authorised.

There is potential for Ireland to enjoy both economic and energy security benefits from its indigenous oil and gas resources. However, such benefits will only be realised through effective exploration. Ireland has a policy of actively encouraging investment by relevant companies in oil and gas exploration, both onshore and offshore. All such utilities are subject to a robust regulatory framework with the clear objective of ensuring such activities are carried out in a safe manner and without causing harm to the environment.

The holders of the three onshore licensing options granted last year by the former Minister of State, Conor Lenihan, have a first right, under the authorisations given by the previous Government, to apply for exploration licences in the same areas. The granting of the licensing options has commenced a process which I stress was commenced by the previous Government. In the event that it leads to applications coming before me, any such applications will be subjected to rigorous and detailed assessment. Strong regulatory processes are in place, involving An Bord Pleanála, the EPA, my Department, the Commission for Energy Regulation and others, that would apply to future projects. All these bodies, other than An Bord Pleanála, would have an involvement at both the exploration and production phases. All these processes are subject to a range of national and European Union legislation, including the environmental impact directives, and include a public consultation phase to ensure concerns of the community are heard.

I acknowledge that people have, as is right and proper, concerns that the use of hydraulic fracturing in exploration and production activities could have a negative impact on the environment. Plenty of examples may be found if one considers the film "Gasland", reads the press, examines the finding of the American Environmental Protection Agency, considers what happened in France and so on. This is an important subject and the Government is concerned that if hydraulic fracturing does take place, it must only do so in the most stringent and acceptable of circumstances. The principal concerns expressed relate to the production phase of a project. The production phase in commercial production entails the use of chemicals, some of which are carcinogenic. Moreover, I refer to other serious issues such as the impact on the water table, the possibility that methane gas might flow from one's tap and so on. Regardless of whether they relate to hydraulic fracturing or loose practice, these are the issues, each of which must and will be considered in this context.

Members of the House are aware that the debate on fracking is taking place worldwide. In a number of European countries exploration for unconventional gas is ahead of Ireland. Countries such as France have introduced a ban, while Poland actively encourages this form of exploration. In the United States there has been extensive exploration, as well as strong debate and considerable controversy. Members are aware that the Internet is rich with articles on the subject, many of which express contradictory views. However, a US EPA preliminary report found that compounds associated with chemicals used in the United States during the drilling of wells that had been hydraulically fractured were also found in groundwater at locations near an exploration project. The findings in this preliminary report have been challenged by the exploration company and the final outcome has yet to be decided.

The key lesson to be taken is that decisions can only be made on the basis of the best expert scientific advice available. This is the reason the EPA which is conducting preliminary background research will undertake more extensive research on the matter later this year. This research will help to inform the Government's decision. Any further applications will be the subject of a number of robust consent processes and any decision I make as Minister of State will be informed by detailed scientific assessments.

Deputy Timmy Dooley

While I welcome the Minister of State's appearance in the Chamber to discuss this issue, I am disappointed he has stated it is not about declaring Ireland to be a fracking free zone, as it is. Carbon fuels are a finite resource and at some point the supply in the ground will be exhausted. The sooner this is accepted the better and the sooner this becomes obvious to exploration companies, the sooner alternatives will be suggested. It is not permissible to destroy the environment and the Earth to the point of no return only to then accept all the fuel is gone and we have to find an alternative. This will happen until such time as governments state enough is enough, which would force investment in alternative energy sources. If the government of a small island such as Ireland which, because of its greenness and tourism potential, is synonymous with respect for the environment is not prepared to do this, we have much to learn.

The Minister of State is the kind of campaigning Minister who could take the bull by the horns and turn it around. He could stand out across the world, were he prepared to take this decision. I implore him not to be driven by certain individuals within his Department who have a view that this would be good for the country from a commercial perspective. The argument is that as Ireland is going through difficult economic circumstances, it should try to exploit and explore the potential to be found in the environment in this regard. Even were we to destroy the environment, we would ultimately reach a point at which no more mineral resources were available. We must, therefore, be bold and brave and take a long-term view. I ask the Minister of State to give further consideration to this issue which I acknowledge is one that will require a whole of government approach and thought process. He certainly should not rule out the principle of making Ireland a fracking free zone.

Deputy Fergus O’Dowd

While I appreciate the Deputy's comments, I repeat that when in government, Fianna Fáil granted the initial licences and that a process has commenced. Consequently, it is not realistic to tell me that it has not commenced. The Government is considering and dealing with the process.

Deputy Timmy Dooley

A new Government is in place.

Deputy Fergus O’Dowd

May I finish? I did not interrupt the Deputy and it is important to have complete clarity on the issue. The process has started and the companies in question will return by the end of the year with a view as to what they think they have found, after which they will proceed to the next stage when I will have to give due consideration to all the arguments made. When that stage is reached, I will be advised by the EPA. The latter is already carrying out a desktop study and is committed to carrying out a much more detailed analysis by the end of the year. The analysis in question was not carried out prior to the licences being issued by the former Minister of State, Conor Lenihan. The difficulty is that we cannot turn back the clock in respect of this issue. I assure the Deputy that any decisions I make will be based on the best advice available from the EPA and internationally.

If there is a chance that billions of euro in untapped gas could be brought to the surface and thereby provide a massive boost to the economy, then we must take account of that fact. If it became possible to create thousands of jobs in my constituency or that of the Deputy and in view of the fact that we import most of our energy, then that prospect would be worthy of serious consideration. I accept the point the Deputy made in respect of renewables and I will be happy to debate the matter further with him at any stage.

Telecommunications Services

Deputy Joe McHugh

I welcome the Minister. I am glad to have the opportunity to reiterate the sentiments I expressed and observations I made at the relevant committee in 2010. This debate provides an opportunity to appraise the position with regard to the level of mobile phone coverage available in Ireland and also to consider what has happened since 2010.

In the period 2008 to 2010, there was a 30% increase in the number of text messages sent. Between March 2010 and March 2011, 5.6 billion texts were sent by Vodafone customers alone. The breakdown of the relevant statistics shows that of the various mobile phone operators, 3 has a market share of 5.8%, Meteor's share is 20%, Vodafone's is 42% and O2's is 32%. There is a need to analyse why there has been such an exponential growth, approximately 10.8%, in the number of texts sent. We could state that things may be good and that from a business point of view, this could be seen as a positive development. However, we must also examine the position with regard to various areas in which there is basically no mobile phone coverage. This is leading to large numbers of dropped calls.

In 2010, the Commission for Communications Regulation, ComReg, used a very specific methodology to measure mobile phone coverage. This was population-based and was focused on the cities. In carrying out its analysis, ComReg engaged in test drives along national primary and secondary routes. Obviously, this did not take account of coverage on smaller roads and, as a result, we can question the methodology, particularly as the results which it produced have given Vodafone, O2, Meteor and 3 the opportunity to state that they provide 99% coverage. Under the criteria set down by ComReg, this is probably correct but it is certainly not the case in reality.

It is important to point out that we are not seeking the provision of additional masts, rather we are seeking an increase in "piggybacking". Many companies are already working together on this. They are also working in partnership with different State agencies. For example, RTE is renting space on its masts to various phone companies. However, there is still a need to discover whether coverage has increased.

My mobile phone bills have not been dramatically reduced. I have spoken to others whose bills have not been reduced either. In addition, there are still high numbers of dropped calls. There is a technical issue with regard to 3G coverage, which relates to videos, e-mails and large documents. In the context of this matter, I refer specifically to 2G coverage. When I leave my home in Carrigart to drive to Dublin each Tuesday, it is a nightmare when I try to have conversations with people on my phone. I travel through Northern Ireland on my way south and even though the Orange and Vodafone UK networks operate there, the coverage is still disastrous.

There are people in the Gallery from Lifford, County Donegal, and I am aware that they have difficulties with dropped calls and that their phones drop into and out of UK coverage. In that context, there is a need for a debate on the entire cross-Border dimension to this matter. When the Ceann Comhairle attends meetings of the North-South Parliamentary Forum hosted in Northern Ireland by the Speaker of the Assembly, William Hay, MLA, he incurs costs if he receives e-mails on his laptop or iPad. We must, therefore, consider this matter in the context of the North-South integration commitments contained in the Good Friday Agreement. We must also consider why we are incurring additional costs and the role played by ComReg.

Let us consider the good co-operation in which the United Kingdom and Ireland engaged in recent years, even prior to Queen Elizabeth ll's visit last May. There is no doubt that a great deal of business is being done. In that context, some 47% of our exports go to the United Kingdom. If we want to turn intangibles such as the positive goodwill between our two countries into something tangible, we should consider ways in which we can make it easier for people to communicate while doing business.

Minister for Communications, Energy and Natural Resources (Deputy Pat Rabbitte)

I thank the Deputy for giving me the opportunity to place on the record of the House some remarks in respect of this matter. I am also glad to take the opportunity to outline some of the initiatives undertaken to improve the quality of telecommunications infrastructure in regional and rural areas.

As Deputy McHugh will be aware, the electronic communications market in this country is fully liberalised and is regulated by the independent regulator, namely, the Commission for Communications Regulation, ComReg. The provision and quality of electronic communications services, including broadband, is a matter for those private sector service providers which are regulated and licensed by ComReg. Broadband services are provided by private service providers over various platforms, including DSL - that is, via telephone lines - fixed wireless, mobile, cable, fibre and satellite. As Minister, I have no role in the operational matters of these private companies.

The role of the State in the provision of broadband infrastructure is generally limited to policy and regulation. In terms of direct service provision, the State can only intervene in areas where the commercial service providers have been unable to offer services on a commercial basis. In this regard, the Government has undertaken a number of initiatives to bring broadband into these areas. In the case of one such intervention, namely, the national broadband scheme, broadband services are available from 3 in all of the 1,028 electoral divisions designated to be covered under the scheme. This includes 200 of the 514 electoral divisions located within the Border area, namely, those in counties Cavan, Donegal, Leitrim, Louth, Monaghan and Sligo. This represents just under 40% of the total number of electoral divisions in the region. As regards the remaining electoral divisions there, the national broadband scheme was prohibited from providing a service in these areas which were deemed to be already served and where to do so would give rise to an unacceptable level of market distortion.

While broadband and mobile phone coverage is now available across the entire country, I am aware that there continue to be a relatively small number of premises that are not capable of receiving broadband services. This is primarily due to technical and other reasons such as suitability of telephone lines, distance from an enabled exchange and no line of sight. The Government's most recent intervention, namely, the rural broadband scheme, which is currently in the verification phase with licensed service providers, is aimed at making broadband services available to individual unserved premises in rural non-national broadband scheme areas. This could include individual premises located in the non-national broadband scheme electoral divisions in Border counties. A total of 1,148 applications to the rural broadband schemes were received from those counties. Each application corresponds to an individual household or premises.

The advances in the provision of private sector broadband, along with the interventions of Government I have outlined, means that Ireland will reach the European Commission's Digital Agenda for Europe target of having basic broadband available to everybody well in advance of the 2013 deadline. The Government accepts that the widespread availability of high-speed broadband is, as Deputy McHugh has argued, a key requirement in delivering future economic and social development. With basic broadband services available across Ireland, the challenge now is to accelerate the roll-out of high-speed services.

I would like to conclude by mentioning the next generation broadband task force, which I chair. The task force is considering how best to facilitate the roll out of next generation broadband throughout Ireland, which reflects a commitment under the NewERA proposals in the programme for Government. The task force will conclude its deliberations shortly. It is my intention to consider the findings, conclusions and recommendations of its report and to move quickly thereafter to put in place the optimal policy environment for the delivery of high speed broadband, and thereby assist in delivering on the commitment in the programme for Government.

I thank the Deputy for raising this topic and am glad to have had the opportunity to respond.

Deputy Joe McHugh

I appreciate the Minister's clarification and I appreciate the work in which he is involved. There are rural areas with no masts and where the dongle can be used on a laptop as well. That has all been acknowledged. The Minister is correct to say that these are private sector players and that he does not have a direct role in what they invest, but we have a role through ComReg. Consumers need the utmost protection in terms of the money they invest when signing up to a service provider, and in the service that they receive. Many will argue that they are not getting service in certain areas, such as in parts of Donegal, Monaghan and Kildare.

We have to examine whether ComReg's objectives to analyse mobile phone coverage through the methodology of the population base is good enough. We can be open about this conversation and it is good to have an ongoing analysis. It is important to see if the Department of Justice and Equality is open minded to use Garda station masts as piggy backs for mobile phone services, rather than have new masts built. I know that RTE masts have been used by different service providers.

Can the Minister analyse the methodology used by ComReg to measure the broadband coverage? The advertising literature of Vodafone and O2 claim that they have 99% coverage. That is the case according to their rules, but in reality they do not.

Deputy Pat Rabbitte

I accept Deputy McHugh's point that a methodology that relies solely on population does leave rural areas in some difficulty. The way things have developed in recent times means that there is fierce competition between the private sector companies for the urban consumer, but some of the same companies are not very interested in the less populous areas to which Deputy McHugh makes reference. That is a concern.

I was looking at the electoral divisions for the counties, which is the subject of the motion. There is only 35%-58% coverage of the national broadband scheme in those areas. That leaves a gap. The purpose of the next generation task force is to devise a road map for the future that will identify where there is normal competition between the private sector operators and the rest, and figure out what the Government can do about the rest. There is a basic service everywhere nowadays, but I accept that it can be too basic in some areas and that there is a genuine problem with speed and quality that must be addressed.

I hear Deputy McHugh's essential point, which is that there is a necessity to re-examine the driving methodology of the regulator, which is population based. I certainly will take that on board.

Post Office Network

Deputy Paudie Coffey

Following on from the last debate, this issue is about service provision that is essential for our citizens in rural areas. We must never underestimate the value of the post office to deliver economic and social services to citizens residing in rural Ireland. Not only do they have access to postal services, but also to essential services such as banking, the television licence payment system and social protection payments.

There are areas I would like the Minister to examine to ensure the future viability of our post offices, such as the payment through our post office network of motor tax and the new household charge. I know the Minister is looking at new household broadcasting charges. Access to those services should be available to rural citizens as well as urban citizens on an equal basis.

As a semi-State company, An Post has a commercial mandate from the Government, but I believe it should also have a social obligation to meet its customers' needs. Many post offices have already closed in rural Ireland, and the impact has been felt severely in those areas. An Post may justify these closures due to the proximity of the closing post office to other available post offices in the jurisdiction. However, the time has come where we need full transparency around these decisions. We need clarity on the criteria used by An Post to close such post offices.

Kill is a rural village in the heartland of mid County Waterford, and the post office there services a full 10 km radius, and includes villages such as Bunmahon, Dunhill, Annestown and Ballylaneen. None of those villages has a post office and the people in the area all use Kill post office.

This post office was burgled in October 2011 and there were problems. I believe An Post took an opportunistic decision to close the post office. I took the matter up with the CEO and the senior officials in An Post, and I was very disappointed with the response. It took two months for an elected representative to get a response from the chief executive of a semi-State company. Not only that, the information on the letter was incorrect. It stated that the nearest post office available to the remaining customers is four miles away, when in fact it is 10 km. It is just not good enough for an area with no rural transport links to be abandoned and left in isolation. This issue needs to be revisited and a social impact assessment carried out prior to any decisions being taken by An Post.

Deputy Ciara Conway

I want to take this opportunity to speak about the basis on which An Post currently justifies the closure of rural post offices, namely, on economic grounds and non-viability. This does not take into account the commercial services that accompany such post offices, such as those outlined by Deputy Coffey like banking services, social welfare distribution and often private shops, which are a vital part of the rural infrastructure of local communities. Post offices are often the focal point for people and give business and life to the local shop, which is a central part of any rural society. I would also like to point out that post offices provide a social support to individual members of the public, mostly those who are elderly and at risk of further isolation.

I understand that An Post is a semi-State company and has a commercial mandate, but the Government also has a stake in Bus Éireann and the ESB. Bus Éireann provides, perhaps not to the extent that we would like, a service that is non-profitable to areas of low population. The ESB provides electrification at a commercial loss to the islands. The Minister should look at how An Post can also provide a service to these rural communities. Deputy Coffey has outlined the difficulty faced by many people in mid County Waterford with the closure of Kill post office. I bring to the Minister's attention some statistics of which I have become aware in recent weeks. The week prior to the robbery and the subsequent closure of the post office almost 700 transactions took place there. This shows a great opportunity to grow its viability. As Deputy Coffey mentioned, we can also look at the introduction of other services such as motor tax and foreign exchange. We could look outside the box. Rural County Waterford is a very scenic and beautiful place and we could have tourist information points for those we want to visit the county. We should consider the example of the ESB which operates at a loss by providing electricity to the islands and rural parts of the country. Will the Minister take on board these points?

Deputy Pat Rabbitte

The Government's core policy goal for the postal sector is to ensure Irish customers, whether business or residential, enjoy competitively priced, high-quality postal services. The Government is committed to a strong and viable An Post and supports its maintenance of the maximum number of economically viable post offices.

The Government also appreciates the importance of the rural post office infrastructure. The programme for Government recognises that the universal postal service is an essential public service, especially in the case of rural communities and those disadvantaged communities affected by the digital divide. The importance of the postal business and the post office network was recognised by Deputies during the comprehensive debate on the Postal Services Act last year.

Deputies are aware that the commercial operation of An Post's post office network is a matter for the board and management of the company and not one in which I have a direct statutory function. An Post's original mandate stems from the Postal and Telecommunications Services Act 1983 under which it was established. The company is required to provide counter services for its own and Government business and other uses which the company sees fit. This counter business has developed significantly over the years and now encompasses a range of financial and bill payment products which are offered alongside the more traditional features such as NTMA products, social welfare payments and stamp and television licence sales.

An Post is facing challenges in its postal and mail business from the revolution in communication technologies. An Post must build on its intrinsic advantages such as the scale of the post office network, brand name and strong connection between postmasters and their local community to re-invent itself as a dynamic and sustainable business in the technological age. I am confident the management and staff are capable of doing this.

An Post management has succeeded in growing business at post office counters generally. Most Deputies are familiar with some public concern at queues and delays in certain post offices. This is not the sign of a failing business. Equally, Deputies should be aware of the success of new services such as foreign exchange in certain outlets. The counter business is not immune from the threat presented by the development of electronic alternatives to traditional counter business. An Post management cannot wish this away, nor will I ask it to.

At the last An Post AGM, it was made clear to the board that new value-added services must be found to maximise the potential of the post office network. The recession and banking crisis have increased the amount of business being conducted through post offices. An Post must take advantage of this and has been encouraged to give further consideration to identify scope for post offices to generate additional business, particularly on the banking agency side.

As a result of large-scale investment in the computerisation of the network, the company has had success in securing business growth in its contractual arrangements with AIB, Western Union gift vouchers, Garda fines and BillPay. In addition, An Post wins a significant amount of business from Departments for postal services and financial services delivered through the post office network. Approximately 62% of post office network business comes from Government work. However, while the Government will continue to strongly support An Post, a reliance on Government contracts in the future is not a valid or robust strategy for An Post to take to address the challenges it faces.

The Department of Finance is looking at strategies for the further development of e-inclusion initiatives in the financial services area. An Post already has a strong track record in dealing with people who are financially excluded and An Post will have a central role in the development and implementation of initiatives along with the other stakeholders in the area. The Department is working to ensure the advantages offered by An Post are fully recognised in the design of products and services to address financial exclusion.

The importance of An Post to rural communities is well recognised and as a company it must seize all opportunities to remain relevant to its local customer base. I understand the concern of the Deputies about the financial viability of the post office counters service. I will continue to facilitate business expansion by the post office counter business because it is only this growth which can provide a sustainable basis for the survival of an expensive post office counter service in rural Ireland. I will pay particular attention in the months ahead, with my colleagues the Minister for Finance and the Minister for Social Protection, to the development of a universal basic bank account product which I want to be accessible in the post office network nationwide.

The Government recognises the strategic importance the postal sector plays and the central role An Post has played to date.

Deputy Paudie Coffey

I thank the Minister for his comprehensive response. He has identified many challenges facing An Post and I agree it needs to reinvent how it delivers services to those in rural Ireland. However, it certainly cannot provide these services if it closes post offices without tangible assessment of what extra delivery could give rural areas. Will the Minister take an active interest in this area on behalf of rural citizens? I do not expect a post office at every crossroads; far from it. However, I gave the example of there being no post office in a 10 km radial in mid-County Waterford.

The Minister used the phrase "financial exclusion" and this is what is happening to many customers of the Department of Social Protection who used the post office in Kill. They are financially excluded because there is no rural transport link or ready access to alternative postal services which are more than 10 km away. This is unacceptable and An Post needs to review this. The Government must be cognisant of the changes in rural Ireland to ensure that we protect services as far as possible.

Deputy Ciara Conway

The CEO of An Post acknowledged that the post office network is vital to businesses and the social fabric of Irish society. The social dimension of An Post's services is under-estimated, misunderstood and misrepresented by An Post. If the CEO truly believed what he stated Kill post office would not have been closed. He showed disregard for the residents of the area by not even having the correct information, stating that the nearest post office was only four miles away when it is more than 10 km away with a round trip of more than 20 km. For people already struggling to collect pensions this is a considerable imposition. There are no rural transport links or Bus Éireann services to facilitate access to An Post services. Decisions on the closure of post offices cannot be made on economic imperatives alone. The social impact of something like this cannot be measured on a balance sheet.

Deputy Pat Rabbitte

I accept what Deputies Coffey and Conway have stated on the social role and responsibility of An Post. We spent a good deal of time during the debate on the Bill discussing this very issue. The difficulty is that An Post is also a commercial State company and it must be viable; this is its mandate. It is this balance between the commercial mandate and the social responsibility that is sometimes difficult to get right.

I agree with Deputy Paudie Coffey that there is a need for the company to continue to reinvent itself. We should make no mistake: electronic substitution has caused the gravest of problems for An Post and there has been a dramatic decline in its revenue in recent years. There has been a drop in volume of more than 20%, which has caused very serious difficulties for An Post.

As regards the fact that Kill post office is closed, until Deputy Conway brought the matter to my attention yesterday, I was not aware of it. I do not know the circumstances surrounding the robbery that seems to have precipitated its closure, but I will undertake to raise the matter with the chairman of the company. I do not know whether it is the intention to reopen it. I accept it is not the most strategic approach to the retail infrastructure of An Post that, for whatever happenstance, that if a post office is closed, it will remain closed because it is one less. I will examine the prospects in the case of Kill post office in that context.

Dáil Éireann debate - Wednesday, 25 Jan 2012