Vol. 511 No. 1
21 Mr. J. O'Keeffe asked the Minister for Social, Community and Family Affairs the reason the decision made in May 1999 to extend the contract between his Department and An Post for delivery of social welfare payments from 1 January 2000 has not been finalised; and the position in this regard. [23590/99]
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.
Does the Minister accept that he is in a terrible tangle over the An Post contract? Does he accept that he initially wanted to put the contract out to tender but that he and the Government reversed engines prior to the local election, when the Government decided to open negotiations with An Post? Now I understand we have not one but two complaints to the EU Commission about the present state of affairs, which the Minister might confirm. We have no arrangements in place and the contract is due to expire at the end of next month. Does the Minister accept that he has been grossly irresponsible in his handling of this business?
I do not accept that at all. The Government was faced with a situation which was a legacy of the previous Government, which blandly agreed to extend the contract. The condition of that extension was that the matter would go out to tender at the end of that extended period. On the basis of advice received, the Government decided, in view of the impact this would have on the delivery of service around the coun try and particularly on rural post offices, to renew the contract in effect. That is still the Government's position. As I said, one party has made a complaint to the Commission based on two issues and that is being examined by my Department.
There are two separate issues, one of which was received by the Minister's Department on 30 September and the other on 12 October. It is misleading this House to suggest there was only one issue. In his attempt to foist the blame on the previous Government—
I have not said that. There is one party with two issues involved in its complaints.
There are two complaints. The first of these complaints related to certain competition-related articles of the EEC Treaty and the other suggested that the decision breaches the obligations laid down by Council Directive 92/50/EU. Those are two separate complaints. However, that is not the point I want to come to – it is the further attempt by the Minister to point the finger and blame the last Government. Does the Minister accept that on 1 September 1998 he met the Minister for Public Enterprise and made it clear at that meeting that he wanted to put this contract out to tender and that there were other organisations seeking to get in on this business? He complained at that meeting that the An Post service was expensive in comparison with alternatives and that was the basis on which he decided he wanted a cheaper option to An Post. It is misleading, unreasonable and unfair to suggest that the tangle the Minister is in has anything to do with the last Government.
I reiterate that the Government has looked at all the circumstances involved in this matter, which is extremely complex. Is the Deputy suggesting for one minute what perhaps his Government anticipated at the end of the extension of the contract – that the contract be put out to open tender? That would be the death of rural post offices and we do not accept that on this side of the House.
That is what the Minister decided.
As we said in our document on rural development, we are prepared to look after rural post offices.
We must proceed to Question No. 22.
The Minister will hear more about this. The file is available to the public.
