Wednesday, 27 March 2019

Questions (49)

Brian Stanley


49. Deputy Brian Stanley asked the Minister for Communications, Climate Action and Environment the position regarding the future of An Post retail and mail delivery and sorting businesses in the context of the retention of the universal social obligation. [14278/19]

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Oral answers (6 contributions) (Question to Communications)

I refer to the retail and mail delivery services of An Post. A significant amount of work was done to reform An Post. This House passed legislation in that regard and there was cross-party support for ensuring that the company was put in a more secure position. However, there is still uncertainty in regard to the survival of the post office network and, in particular, the mail distribution network and mail centres. What options for the survival of the mail centres has the Minister considered in his discussions with An Post? When will we know their future?

An Post is a commercial State company with a mandate to deliver a postal delivery service and a viable post office network. It is also designated as the sole universal service provider under the Communications Regulation (Postal Services) Act 2011 which requires it to, among other matters, fulfil the universal service obligation of a five-day-per-week delivery service.

Operational matters and the role of developing and implementing commercial strategies for An Post mails and retail businesses are matters for its board and management. An Post has developed a strategic plan which includes measures such as investing €50 million in growing and modernising the post office network; splitting the company into two distinct business units, namely, An Post Mails and Parcels and An Post Retail; relaunching its parcel business following a breakthrough labour agreement; and diversifying and growing its financial service products. It has recently reported strong growth in its parcel business and a much improved financial performance. It is continuing to make good progress in implementing its strategic plan which will see a range of developments across the mails and retail businesses. A refreshed and modernised An Post brand has been launched in recent weeks, alongside a new financial services proposition, An Post Money, and a new business-to-business brand, An Post Commerce.

A €30 million loan was provided by the Government to An Post to support the required transformation programme. This helped ensure the continued delivery of the universal service obligation to deliver post to every address every working day - which is a European Union requirement - and to support a nationwide post office network.

The Deputy raised the issue of the sorting business. In 2017, as part of a Labour Court recommendation the payment of a pay increase was conditional on necessary cost savings being achieved. One of the requirements was the closure of one of the four An Post mail centres. No decision has been made by the company on which centre shall close.

Although it is a matter for the board and management of An Post, it is also a matter for the shareholder, on behalf of the public, which owns it. The Minister is the representative of the shareholders in this matter. There has been reform in this area. The McKinsey report has been completed.

The results of the report were that one mail centre would close. Has the Minister of State discussed this with management of An Post? Has he given any direction to An Post in that regard? What is the Government's preference? What will happen to mail centres such as the one in Portlaoise where 200 people are employed full time and there are hundreds more temporary staff? An additional new facility has been built beside the mail centre and taken over by An Post. It is also available for local distribution. In about two or three months the front door will be on the N80 because of the completion of the orbital route around Portlaoise. It is only 1 km from the N7 and N8 junction and only a couple of hundred metres from a rail connection on the main Dublin-Limerick-Cork railway line. Therefore, it is in a very strategic position. Workers in the company and that centre need certainty.

In September 2017 the Labour Court issued a recommendation on a 2% pay increase from July 2017 in An Post. The payment was conditional on the achievement of necessary cost savings. As I said, one of the requirements was the closure of a mail centre. There are four mail centres. There is one each in Athlone, Cork, Dublin and Portlaoise. No decision has been made on which centre will close. Consideration in that regard is ongoing. I re-emphasise that the final decision will be made by the board and management of the company. The Minister, Deputy Bruton, had general discussions with An Post but no specific discussions on what it should do and no direction will be issued to the company. This is an operational issue. Any job losses will continue to be managed in accordance with the industrial relations framework within An Post.

I am aware of the 2% pay increase and on what it was conditional, but there is a new situation in that the parcel business has grown hugely and An Post is short of warehouse space because of it. The growth has given a new lease of life to the four mail centres in terms of the utilisation of space and the demand for facilities. We should not, therefore, be taking an axe to the centre when there is a viable business. I am informed that the parcel business increased by nearly 40% last year. The centre's closure would have huge economic consequences for the whole community and the midlands. County Laois has not exactly been top of the list when it comes to IDA Ireland investments, although there have been a couple of very recent welcome announcements. We have had the Kerr and McKinsey reports. There is a long way to go to reach the strategic position where the centre will be located in all transport hubs, including rail and road and everything else to which I have pointed. There are a couple of hundred workers who have mortgages and families and are trying to get their children through the education system. In many cases, the sole income earner in the family is the worker in the mail centre. It is time to remove the uncertainty.

I re-emphasise that this is an operational issue. What the Deputy has said about the increase in the parcel business is good news. With our strategic plan, An Post has turned itself into a company that is moving forward and developing new business. It has been and will be strategic in its approach and the decisions it will make on the mail centre. It will do so in its best interests to ensure it will remain viable and also in the best interests of the workers within it to ensure the business can develop and that any decision it makes will help it to develop. It is good news that An Post is looking for new business and creating new models. It is very good news for rural Ireland. However, any decision An Post makes will be in its interests and those of the workers and the general public.

Questions No. 50 replied to with Written Answers.