Thursday, 24 Oct 2013

Priority Questions

Energy Prices

Ceisteanna (1)

Michael Moynihan

Ceist:

1. Deputy Michael Moynihan asked the Minister for Communications, Energy and Natural Resources if he is concerned by recent reports from the Society of St. Vincent de Paul charity that it is paying more than €10 million a year to gas and electricity companies to help families pay their energy bills; the reason cumulative gas and electricity price rises since 2011 have added €500 to the average household energy bill; and if he will make a statement on the matter. [45356/13]

Freagraí ó Béal (5 píosaí cainte)

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

The main cause is that rising international gas prices have resulted in knock-on increases in both gas and electricity prices, the latter because of the role gas plays in the Irish power generation portfolio. Given our reliance on imported gas, increases in gas and electricity prices are, in turn, caused by increases in international gas prices as well as increased transport charges and adverse movements in exchange rates.

In line with the European average and increasing wholesale gas prices, for example, in the United Kingdom, retail energy prices have increased since 2009. Three of the UK's big six energy companies have recently announced price increases of between 8% and 10.4% for their electricity and gas offerings. Therefore, I welcome the decision of Electric Ireland and Bord Gáis Energy not to increase electricity tariffs this year. The Deputy will be aware that Airtricity has announced its intention to increase prices by 3.8% from 1 November.

The matters raised by Deputy Moynihan are naturally a concern to me, the Government, the regulator and voluntary organisations. The work of the Society of St. Vincent de Paul and other similar organisations in supporting those who are in debt or who have difficulty paying bills is to be applauded. However, the society does not explain how it arrives at the figure quoted by the Deputy nor does my advice support that figure.

The affordable energy strategy is the centrepiece of the Government's strategy to protect these households at risk from energy poverty. The strategy was published in November 2011 and identifies 48 actions for implementation. Upgrading the thermal efficiency of people's homes is fundamental to addressing energy poverty, with the main delivery mechanism being the better energy warmer homes programme. Under this programme households can obtain a range of grants to provide draught-proofing, attic insulation, lagging jackets for hot water tanks, low-energy light bulbs and cavity wall insulation, which are free of charge to low-income families.

Additional information not given on the floor of the House

The better energy warmer homes programme was allocated Exchequer funding of €21 million this year and this is expected to result in the upgrading of over 10,000 homes. It is anticipated that the better energy allocation in budget 2014 will allow energy efficiency measures to be installed in a further 15,000 energy-poor homes next year, bringing the total number of low-income homes supported by the programme to more than 120,000 since its launch. In total across the wider better energy programme more than 250,000 homes have received Government support for the installation of energy efficiency improvement measures.

Responsibility for the regulation of the retail electricity and gas markets is a matter for the Commission for Energy Regulation, which is an independent statutory body. Retail electricity prices are fully deregulated and similarly for gas, except for Bord Gáis Éireann tariffs for domestic consumers. In this regard, I welcome the recent announcements by two of the main suppliers, Electric Ireland and Bord Gáis Energy, to freeze their prices for the remainder of this year. I have no statutory function in the setting of electricity or gas prices.

Electricity and gas costs in Ireland are influenced by various drivers, including global gas and oil prices, the costs of capital, exchange rate fluctuations and the small size of the Irish market. The wholesale price of gas is the most significant factor in the case of Ireland for electricity and gas. This has risen steadily since 2009, driven by events such as those in the Middle East, north Africa and Japan.

Deputy Michael Moynihan

The issue has come to light in respect of the Society of St. Vincent de Paul and what it has stated about gas and electricity prices. The society is engaging with people and their bills. Information has come to me in recent days in respect of Bord Gáis Éireann having a difficult relationship or making it difficult for families to operate pay-as-you-go meters and almost trying to disown them or get out of the deals they have done with the people involved. I call on the Minister to take up the matter with Bord Gáis Éireann because the information I have is that the company is putting them at arms length and seeking to get rid of those customers who are in difficulty and who are relying on the Society of St. Vincent de Paul and others to try and pay their bills.

The fundamental issue I have, which I have raised several times, is that we have seen international prices change and so on. Is the Commission for Energy Regulation doing its job properly in allowing these companies to get increases? It is high time that we had a full review of the matter. Certainly, there is evidence in respect of the companies getting a bigger increase than they sought. We need to face this down because there is a crisis.

Deputy Pat Rabbitte

I hope Deputy Moynihan is wrong, but if he is right I would be concerned about the point he has made about pay-as-you-go meters. The protocol we have in place prevents disconnections where a pay-as-you-go meter is installed. I would be very concerned if his information is correct in that regard and I undertake to act as he says. If he can give me any more precise information on it I would be especially pleased.

The thing should be going in the other direction. We are trying to encourage consumers, especially consumers at risk of fuel poverty, to allow the meter to be installed or to enter into a payment plan to avoid disconnection. That is the real issue. Happily, it has not affected us yet this year and I hope it will not, but if we were to have a severe winter, Deputy Moynihan is correct to draw attention to it.

The questions Deputy Moynihan raised about the regulator, company profits, prices and so on are major issues in energy policy at the moment everywhere I look. One could not have opened a newspaper or watched a television programme in Britain in the past three or four weeks but it is the subject of political and economic contention. We have seen the big six hike their prices there between 8% and 10.4%. The ESB has given a commitment to freeze prices until the end of the year and into next year, and similarly Bord Gáis Energy. That is welcome but it does not mean to say that there are not people under genuine pressure.

Deputy Michael Moynihan

That is a fundamental point. Halfway through 2012 the ESB showed a vast profit but the line given out was that the company would have greater expenses in the second half of the year. However, the company showed the same profits for the second half of 2012 on the back of a major price increase.

I was in contact with the regulator on the matter and I am raising it with the Minister now. As the Minister correctly pointed out, there is a fundamental issue in respect of the profits being made by energy companies on our shores and on the backs of ordinary people. We need a fundamental examination of this policy and how we, as a society, are going to deal with it. It cannot be that these companies make vast profits from people who are under savage pressure.

Deputy Pat Rabbitte

It is a major issue and I too have had discussions with the regulator. The regulator points out that significant investment is needed to maintain the system and security of supply. Investments in energy projects are singularly expensive. Electricity and gas costs in Ireland are influenced by various drivers, including global gas and oil prices, the cost of capital, exchange rate fluctuations and the small size of the Irish market. The wholesale price of gas is the most significant factor in the case of Ireland for electricity and gas and this has risen steadily, as Deputy Moynihan noted, since 2009, driven by events such as those in the Middle East, north Africa and Japan. The regulator will explain that these are all factors advanced by the suppliers when they put in an application. We are price takers, unfortunately.

Anyway, it is a matter of concern in terms of the heart of Deputy Moynihan's question, which relates to people in poorer circumstances who have to resort to the Society of St. Vincent de Paul to assist with their energy bills. That is a situation of serious concern to me.

Hydraulic Fracturing Policy

Ceisteanna (2)

Michael Colreavy

Ceist:

2. Deputy Michael Colreavy asked the Minister for Communications, Energy and Natural Resources if his attention has been drawn to the structural damage to hydraulic fracturing equipment with consequential environmental damage and possible water contamination triggered by recent flash floods in a heavily fracked area of Colorado, USA. [45353/13]

Freagraí ó Béal (21 píosaí cainte)

Minister of State at the Department of Communications, Energy and Natural Resources (Deputy Fergus O'Dowd)

I am aware of reports of the incident to which the Deputy refers.

No application proposing the use of unconventional gas exploration or extraction has been approved in Ireland. No decision will be made on applications for exploration licences proposing the use of this technology until after the results of the Environmental Protection Agency research into the potential environmental impacts of unconventional gas exploration has been finalised and its findings considered and fully debated. A final report in this regard is not expected before 2015.

It should be acknowledged that physical geography and geology vary from country to country and the Irish environment is different to the environments in which many unconventional gas projects and operations are taking place worldwide. While we can and will learn from experiences in other countries, we should remember that any application proposing the use of unconventional gas exploration and extraction in Ireland must be subject to environmental impact assessments in accordance with the EIA directive. Such an assessment would entail consideration of the potential impact of the project on the population, fauna, flora, soil, water, air, climatic factors, material assets, including the architectural and archaeological heritage, landscape and the inter-relationship between these factors.

It is the case, therefore, that if the use of unconventional gas exploration and extraction were to be introduced in Ireland that the risk of flooding would fall to be considered by the environmental impact assessment.

Deputy Michael Colreavy

I thank the Minister of State for his response. In my role as Opposition spokesman on communications, energy and natural resources, I speak with people from both ends of this debate. I speak with representatives from the companies whose motivation is clear, namely, the desire to make money, which is fine. However, I also speak with people who have been affected by fracking, including people from Colorado and Pennsylvania. Shortly after Christmas, the Taoiseach spoke in glowing terms of what he found in Pennsylvania but the people from those states have told me they thought their Government and the Government agencies were on the side of big business in each step taken with regard to hydraulic fracturing. I was glad to hear the Minister of State indicate the Environmental Protection Agency, EPA, will take into account the possibility of flash flooding and of storms when considering this application. However, I ask further that the EPA and the Minister of State himself meet and converse with those who have been damaged by fracking, as well as talking to the businesses concerned and the regulatory bodies. The Minister of State also needs to hear the stories of those who have been damaged by hydraulic fracturing in other jurisdictions. I ask the Minister of State to give that commitment.

Deputy Fergus O'Dowd

I assure the Deputy that I have met and will continue to meet any group or agency that wishes to discuss with me their concerns about fracking, regardless of whether they are from County Leitrim, Pennsylvania, Colorado or wherever. My door is open and my job is to listen and to learn. To be specific however, the proposed EPA study will include consideration of the regulatory approaches of other countries that have extensive experience with unconventional gas exploration. This study will examine all of that and the best environmental practice for unconventional gas exploration and extraction projects will entail using the most effective techniques in achieving a high general level of protection of the environment and human health as a whole by demonstrating strict adherence with all relevant environmental legislation. In this regard, the programme will take an overview of the European Union environmental legislation applicable to unconventional gas exploration and this will include legislation that relates to all aspects of unconventional gas exploration. It will examine detailed information on the regulatory approaches of other countries that have extensive experience of this activity. This will include, where possible, a review of case studies where unconventional gas exploration and extraction covered more than two jurisdictions, that is, where transboundary activities would occur. Moreover, a minimum of five countries will be examined, including at least two within the European Union and at least one country in which a moratorium on unconventional gas has been introduced.

Deputy Michael Colreavy

I thank the Minister of State for his clarification and I assume the finding of all these studies will be laid before the House.

Deputy Fergus O'Dowd

Absolutely, yes.

Deputy Michael Colreavy

They should be forwarded to the spokespersons as speedily as possible. As I do not believe Members will get to this issue during Question Time, I have a further question. There is growing evidence that hydraulic fracturing and those involved in it are part of a giant Ponzi scheme, because it is costing three times as much as had been projected to get the volume of gas they are getting in the United States. Will the Minister of State ensure there is an independent, not an industry-based, study, into the real economics of hydraulic fracturing? Will such an independent study feed into the eventual decision over and above the report from the EPA? There are real fears in some jurisdictions that where negotiations have yielded some financial payback to governments, it is offset by the additional costs involved therein. There are real fears that those who are investing in hydraulic fracturing now are getting extremely jittery and worried and that banks are pushing the companies involved to drill to an ever increasing extent to cover the initial outlay.

Deputy Fergus O'Dowd

On the question of public consultation, I also might add that when the EPA advertised for public views, more than 1,000 submissions were received. Obviously many of them dealt with the environmental impacts to which the Deputy has referred but a considerable number of concerns were raised on the potential impact to human health, leading to the steering group agreeing it would add a health expert to scrutinise the data it had been examining.

As for the specific question the Deputy now has raised, the economic cost to a company to do anything in respect of planning, in other words, what it spends on its operation, must be borne by the company itself. However, the Deputy is correct in that if there are other costs on the community, such as improvements to roads, engineering works or whatever, there obviously also are community costs arising from planning permissions. Leaving aside hydraulic fracturing, in the planning process, part of the planning consideration pertains to the economic cost to improvements. In other words, people who apply in respect of a house also are obliged to make a contribution towards water, sewerage and road costs. Consequently, I presume that any application that has an economic impact anywhere in this country and that is wider than the specific company or person making the application, is considered and is part of the planning process. One frequently sees impositions on companies regarding planning applications and moneys levied to ensure that in such cases, whatever they may be, that additional community costs are covered for the community that will be specifically affected.

Deputy Michael Colreavy

Would this cover the lifetime of the project and not merely its establishment?

An Leas-Cheann Comhairle

I am sorry Deputy but we do not have time.

Deputy Fergus O'Dowd

That obviously would have to be a planning consideration.

An Leas-Cheann Comhairle

Before moving on to the next question in the name of Deputy Mattie McGrath, I have just been reminded that as there was no order to extend Question Time beyond 5.45 p.m., that is when we will be concluding and we do not want to eat into the time for the Social Welfare and Pensions Bill. I wished to make that point and call on the Minister to respond to Question No. 3 in the name of Deputy Mattie McGrath.

Deputy Michael Colreavy

I apologise, a Leas-Cheann Comhairle.

Deputy Pat Rabbitte

I must state that I was curious about that. As the Leas-Cheann Comhairle, the Minister of State, Deputy O'Dowd, and Deputy Moynihan will be aware, there was a time when Question Time was sacrosanct in this House. It started at 2.30 p.m. and it did not matter if the sky fell, as it went on at that time but it now appears to have become a moveable feast.

Deputy Mattie McGrath

Government reform.

Deputy Pat Rabbitte

Is that what it is called?

Deputy Mattie McGrath

The Minister, Deputy Howlin, is responsible.

An Leas-Cheann Comhairle

As we only have a small amount of time, we should move on to Question No. 3.

Deputy Michael Moynihan

It might be no harm to revert to that timetable.

Deputy Pat Rabbitte

That is my view.

Deputy Mattie McGrath

And mine.

Deputy Fergus O'Dowd

And mine.

Electricity Transmission Network

Ceisteanna (3)

Mattie McGrath

Ceist:

3. Deputy Mattie McGrath asked the Minister for Communications, Energy and Natural Resources the reason the Government has not adopted a policy of forcing all 400Kv powerlines underground; and if he will make a statement on the matter. [45355/13]

Freagraí ó Béal (47 píosaí cainte)

Deputy Pat Rabbitte

Development of the high voltage electricity grid as planned in the EirGrid Grid25 strategy is critical to Ireland's economic and social development. Ensuring secure, reliable and safe supplies of electricity is critical to Ireland’s ability to attract inward investment and retain and create jobs.

While the case for proceeding urgently with energy infrastructure in line with overall economic social and energy policy goals is critical to the national interest, I am aware that many people are concerned about the impact that new transmission lines and other energy infrastructure can have on the landscape, the environment and on local communities. Accordingly, it is essential that Grid25 and other energy infrastructure are taken forward on the basis of the best available knowledge and informed engagement on the impacts and costs of different engineering solutions.

Neither the Government nor I seek to direct the energy infrastructure developers to particular sites or routes or technologies, as was made clear in the July 2012 Government policy statement on the strategic importance of transmission and other energy infrastructure. That statement emphasises that these are matters for the developers and for the forward planning process through regional and local development plans and at project level through the development management process. In this context, energy infrastructure developers are encouraged to work with the forward planning processes at regional and local levels to set clear contexts for assessment of individual applications for planning consent and to facilitate as wide a degree of consensus as possible as to how and where to meet grid development needs.

The Government, as detailed in the July 2012 policy statement, expects the companies in making their choices of project specific technologies and routing, as well as mitigation measures, to take account of all relevant national and international standards, to follow best practice and ensure value for money and be informed by detailed consultation at local level.

Deputy Mattie McGrath

It is a wonder that the Minister did not blame the last Government for this as well but in fairness to him, he did not. As we are led in everything by Mrs. Merkel, I do not know why Ireland cannot adopt the technology that is in place in Europe and now is the preferred option in Europe for high-voltage cables. Why did the Minister allow consideration of overhead pylons when it already has been decided in Europe that the best technical option is to have such cables placed underground? In his reply, the Minister referred to engaging with people, with the forward planning processes and with local and regional development plans.

That is a load of claptrap because the Minister knows about this better than I do. I heard him speak about this when he was on the opposite side of the House three or four years ago when there was talk of going up to the Minister of State, Deputy O'Dowd's constituency with these lines. I knew what the views of the Minister, Deputy Rabbitte, were at that time and I still know what they are but now this has all changed. The Minister and the Minister of State can laugh but that is the fact of the matter.

There is provision for protected views in the county development plan, on which I worked with the council officials, including protected views of Slievenamon, the Galtees and the Knockmealdown Mountains in Tipperary. Has the Minister costed the damage this would do to tourism? A Bord Fáilte survey showed that 24% of people asked said that these monstrosities would impact adversely on the region. Clearly, this energy will be of no benefit to the Irish economy as it will be exported. It is a case of big business and one of smash and grab. Like everything else, the Minister seems to be letting them do what they like; he is rubbing his hands and saying it all someone's else fault. He is the man in situ to ensure that the people's views are listened to. Thousands of people are turning up to meetings and they want answers; they want fair play and consultation.

Deputy Pat Rabbitte

The Deputy is like Cathy Barry's dog; he goes a bit of the road with everyone. I was not laughing, I was merely-----

Deputy Mattie McGrath

Bhí tú ag gáire.

Deputy Pat Rabbitte

-----pointing out that in respect of the Deputy's claim that he heard me three years ago-----

Deputy Mattie McGrath

I did

Deputy Pat Rabbitte

-----talk about a project-----

Deputy Mattie McGrath

And the Minister's colleagues.

Deputy Pat Rabbitte

-----in the Minister of State, Deputy O'Dowd's area, I never opened my mouth on that one. We will have €100 on it if Deputy McGrath can prove to the contrary.

Deputy Fergus O'Dowd

It was not allowed in any event.

(Interruptions).

An Leas-Cheann Comhairle

Deputy, please.

Deputy Pat Rabbitte

As regards undergrounding, when the Deputy is not performing in the Dáil, in his private moments he will admit that we need energy supply for social and economic development. What is involved here is a €500 million investment to ensure that Munster has sufficient energy supply for economic and domestic needs into the future. EirGrid has learned from previous experience. The reason the Deputy knows about this is that EirGrid has been engaged in a public consultation process opening offices along the route to consult with local citizens about how and where is the optimum route.

Deputy Mattie McGrath

That is baloney.

Deputy Pat Rabbitte

The Deputy knows well that unless we maintain the transmission system we will pay a heavy price for it.

On the Deputy's point on undergrounding, he is not correct in saying that undergrounding is the norm in Europe. The traditional overhead is still the norm and, as we have established elsewhere, the cost of undergrounding is approximately three and half times the cost of-----

Deputy Mattie McGrath

That is not true.

Deputy Pat Rabbitte

It is true. We have had three experts from Scandinavia and, with all due respect to the Deputy's renowned knowledge, those three are experts on projects across Europe and that is the figure that they came up with.

The Deputy also accused me of claptrap in regard to something in his response, which I cannot remember.

An Leas-Cheann Comhairle

The Minister will reply to the Deputy again, no doubt, in due course.

Deputy Pat Rabbitte

Deputy McGrath might remind me of what that was about.

Deputy Mattie McGrath

I do not know whose dog the Minister talked about but he is like Murphy's cow with two dry tits, one blind tit and a sup of milk in the other tit. That is all the Minister is like. It is like the promises he made. Who can trust him about anything? He said on a programme recently that one makes those kinds of promises in the heat of an election. He also said that the people of Tipperary who did not have televisions were cavemen. That is the kind of obnoxious attitude he has.

An Leas-Cheann Comhairle

A question please, Deputy.

Deputy Mattie McGrath

He is lying down and letting the big business get on with this. The Labour Party, a socialist party, was founded in my town of Clonmel. The Minister is allowing big business ride roughshod over the whole community; they have him opening shops and offices and getting him up on a JCB to turn a sod to make this look good. The Minister has really fallen into the trappings of power and into delivering whatever Angela wants. All the Ministers will be fighting to go Europe for the EU Commissioner's job because they will not want to face the public. The people of Tipperary are not going to allow these to go ahead. I am pro-business and pro-economic development but I want reasonable account to be taken of people's right to live in safety, in health and to enjoy their environment and not be persecuted by these obnoxious pylons. The figure cited that the underground option would cost three times the overhead option is untrue. I understand this work a small bit. I am not saying I am the salmon of knowledge on everything but I have a small bit of experience in this kind of work and I know that is a lie. It is an untruth. I am not saying that the Minister came up with that cost but it is not three and half times the overhead option. He should go back and check that and maybe count the tits on Mrs. Murphy's cow.

Deputy Pat Rabbitte

Whatever about the tits on Mrs. Murphy's cow, to be honest that contribution by the Deputy was about as useful as tits on a bull.

(Interruptions).

Deputy Pat Rabbitte

The fact of the matter is that EirGrid has gone out of its way-----

Deputy Mattie McGrath

It has not.

Deputy Pat Rabbitte

-----to consult locally.

Deputy Mattie McGrath

It is a sham.

Deputy Pat Rabbitte

I regret that the Deputy should dismiss as claptrap and out of hand a €500 million investment programme designed to bring secure and safe energy to the south of Ireland-----

Deputy Mattie McGrath

And to hell with the people - to hell or to Connacht.

Deputy Pat Rabbitte

-----in the future. To dismiss it out of hand is entirely unreasonable.

I was in the Deputy's constituency today and I missed him because he always gives a very warm welcome.

Deputy Mattie McGrath

Of course I would.

Deputy Pat Rabbitte

I can assure the Deputy that I never accused any Tipperary man of being a caveman; I said the opposite.

Deputy Mattie McGrath

The Minister said-----

Deputy Pat Rabbitte

I said there are no cavemen in this country-----

Deputy Mattie McGrath

-----that anyone who did not have a television was a caveman.

Deputy Pat Rabbitte

-----and I did not mention Tipperary at all. I want to clear that I did not say that at any stage.

Deputy Mattie McGrath

The Minister did. I heard him say it.

Deputy Pat Rabbitte

No, the Deputy did not.

Deputy Mattie McGrath

The Minister was talking about televisions and he said that anybody who did not have a television was in a cave.

Deputy Pat Rabbitte

The Deputy is so busy talking he never hears anything; he is so busy talking he does not listen.

Deputy Mattie McGrath

I do listen.

An Leas-Cheann Comhairle

The Minister to conclude.

Deputy Pat Rabbitte

This is a good news story-----

Deputy Mattie McGrath

Not for Tipperary.

Deputy Pat Rabbitte

-----and it is very important that the concerns of local communities and local citizens are taken into account-----

Deputy Mattie McGrath

But they are not. That is my point.

Deputy Pat Rabbitte

-----and it is for that purpose that EirGrid has set up an expensive consultation process, along the line of the approximate route yet to be fixed on, where it can hear local representative organisations, local representatives, councillors and citizens make their feed in, as appropriate, to the process.

Deputy Mattie McGrath

The Minister is like the Taoiseach; he is living in a cocoon.

Social Welfare Electronic Payments

Ceisteanna (4)

Michael Moynihan

Ceist:

4. Deputy Michael Moynihan asked the Minister for Communications, Energy and Natural Resources if he has had any communication with the Department of Social Protection regarding the introduction of electronic payment for the social welfare system; his views on the introduction of electronic payments in this area and its effect on the post office network; and if he will make a statement on the matter. [45357/13]

Freagraí ó Béal (6 píosaí cainte)

Deputy Pat Rabbitte

The introduction of electronic payments for the social welfare system is primarily the responsibility of my colleague, the Minister for Social Protection, as part of the payments strategy for her Department. In that regard, I have acknowledged that a move to e-payments will help to underpin national competitiveness. Indeed, the switch to electronic payments for social welfare transactions is a trend that has been apparent for some time with most new social welfare clients using electric funds transfer methods of payment.

As Minister for Communications, Energy and Natural Resources, I am keen to see the development of an e-commerce and digital economy. Social welfare clients should have the same opportunities to avail of the benefits of the digital economy as the rest of us.

An Post has many strengths, such as the largest retail presence in the country, a strong brand and a fully computerised network. Post offices already undertake e-payment transactions and, in common with other retail networks, this trend will accelerate in coming years.

The Department of Social Protection payment strategy intends to implement a strategy whereby the bulk of social welfare payments will be made electronically. I understand An Post will pitch strongly for the social welfare e-payment business when it is put out to tender by the Department of Social Protection.

I have welcomed the recent selection of An Post as the provider of over the counter cash services for social welfare customers. The social welfare contract is the largest contract held by the post office division of An Post. The move to make social welfare payments electronically will clearly pose challenges for the network both in terms of changes to how business is conducted at the counters and the value of the contract in an electronic payments environment. Addressing these challenges is primarily a matter for the management and board of An Post as part of developing a strategy to secure the future of the network.

As Minister for Communications, Energy and Natural Resources, I see a strong future for the network in using its existing strengths to remain a significant player as a front office for Government services, including those provided by the Department of Social Protection.

An Leas-Cheann Comhairle

I interrupt to advise that Question Time will be sacrosanct today in that one hour and 15 minutes will be allowed for it, the full time.

Deputy Michael Moynihan

The An Post network and its services is a fundamental issue. The Minister alluded to An Post's strong brand, and every Member of this House has something to say about An Post, but unfortunately it has been losing retail units. In terms of the transfer of electronic payments from the Department of Social Protection outside An Post, we will not turn the river against the hill.

An Post must move its business in such a way that electronic payments can be made to people's savings accounts and then accessed by the individual through an ATM card of some type. An Post must move on with that because communities are losing their post offices and there are knock-on consequences from that. This is a State contract and it is time the Minister, as the major shareholder in An Post, examined the ways An Post can move on its business. We must ensure every payment can go through An Post because that is what will be required as time goes on. We must ensure An Post is in a position to deal with those payments.

Deputy Pat Rabbitte

I agree with Deputy Moynihan. There is no point in us putting our finger in the dyke. The digital economy is here. The trend towards electronic funds transfer and electronic commerce transactions generally is well under way and if we are to stay competitive, we must ensure we can compete in this space.

We have a unique rate of retail outlets in Ireland in terms of our population. I understand there are still 1,130 offices of An Post throughout the country. It was good that An Post won the social welfare contract last year but undoubtedly that is moving in the direction of going electronic. Therefore, as Deputy Moynihan says, it must bring in new products. It has been developing new products. It has been developing, for example, a relationship with some of the banks that is very productive from the point of view of An Post and the local customer because some of the banks do not want to see anyone presenting at the counter. An Post can do some of that work, and do it usefully.

The new chairman of An Post is a man with many ideas who would agree with the arguments Deputy Moynihan is setting out. Christoph Mueller was a former chief financial officer of Deutsche Post before he took up the job in Aer Lingus, and he has a vision for the future of An Post. The existing management of An Post has done a good job in the new products and services it is offering but Deputy Moynihan is right. We have to grow that. I was glad to see An Post as part of the consortium that won the lottery, for example. That is a very valuable stream of revenue for An Post into the future, but the Deputy is right that the future is digital.

Deputy Michael Moynihan

The future is digital, the office network is computerised and there must be a face-down in terms of that reality. For far too long An Post allowed these retail units to close in smaller communities in particular, and in some urban areas in an effort to rationalise its system at a huge cost to the social fabric of communities. In going after this State contract we must ensure every possible advantage is with An Post in terms of its products and the ability of the punter to get the best possible service from An Post. For as long as I have been a Member of this House we have been talking about transferring the motor tax service to An Post. All these fanciful ideas are great in reports but An Post has never taken them up. It is high time the Minister, as the major stakeholder in An Post, told the company that we must energise this service and give An Post the ability to attract new business in a range of ideas.

Deputy Pat Rabbitte

I take on board what the Deputy is saying. The evidence would appear to be, for example, that where a post office has been refurbished and modernised and has the latest technology, it attracts new business. Deputy Moynihan will know that some of the older offices he has spoken about have been run down, and the trickle of business is limited enough. I know the kind of constituency the Deputy represents but, for example, there is very similar terrain at the other end of the country. I got a telephone call before I came into the House about the post office in Greencastle, at the tip of Donegal, which is threatened with closure because of developments in the family who were the postmasters. I then find that the bank has pulled out of the adjacent village of Moville. It seems there might be an argument for An Post looking at what the bank is leaving behind and trying to maintain the Greencastle facility. An Post will argue that very little business has been going through it, but as Deputy Moynihan said, it is important to the local community and it may well be that An Post would look again at this in the light of the decision of the bank in Moville to pull back and provide a service to people in respect of basic bank products as well.

National Postcode System Establishment

Ceisteanna (5)

Michael Colreavy

Ceist:

5. Deputy Michael Colreavy asked the Minister for Communications, Energy and Natural Resources the measures he will take to ensure the introduction of the recently announced national postcode system does not compromise personal data. [44984/13]

Freagraí ó Béal (5 píosaí cainte)

Deputy Pat Rabbitte

Ireland is the only country in the EU and OECD that does not have a national postcode system, and this Government is strongly committed to introducing such a system. Such a system will be a vital part of the national infrastructure.

On 8 October 2013, I obtained Government approval for the launch of a new national postcode system that will provide a unique seven character code to every letterbox in the State in 2015. The Government has also approved, subject to contract, the appointment of a consortium headed by Capita Ireland as the company which will develop, roll out and operate the postcode system. This announcement follows a procurement process run by my Department.

Most countries have had the benefit of postcodes since the mid-1900s. In making the move now, Ireland has been able to use the technology and systems available today to move to the next generation system. The Irish code will be the first in the world to be unique to each individual address. This will alleviate the current situation whereby more than 30% of all domestic addresses are not unique. It will mean that even apartments and offices in large developments will have an individual code as long as they use their own specific postboxes.

To address any concerns regarding the introduction of a granular postcode system, my Department has engaged with the Data Protection Commissioner’s office on the national postcode system during the procurement process. The commissioner's office has been advised of, and has noted, the rationale and policy justification for the approach suggested for postcode roll-out and implementation.

It should be noted that the provisions of data protection legislation will continue to apply to all holders of personal data linked to postcodes and that unauthorised access to or use of that information will be in breach of the law. In addition, the Office of the Data Protection Commissioner is statutorily charged with independently investigating any complaints raised regarding any national postcode system.

Deputy Michael Colreavy

I thank the Minister. I support the introduction of postcodes in this country and I want to see it work well. There are three areas of concern. Irish language people are concerned that the increasing use of English placenames and abbreviations may become part of the postcodes. The Minister might advise me as to how we can guard against that.

A second concern is that because someone can now go to the person's individual letterbox, there may be personal security or personal data implications. I am aware that in Scotland there was a legal case regarding postcodes and the outcome was that because it only referred to a district but did not identify the individual house, it could not be regarded as data. The unspoken implication was that had the additional three digits that identified an individual house been in place, there was a potential breach of data protection.

Would it be possible to get a breakdown of the costs because it appears to be a very expensive project?

Deputy Pat Rabbitte

I welcome Deputy Colreavy's support for the implementation of a postcode. The fact we did not do so in previous decades means we now have the benefit of technology which was not there previously. This unique identifier will be at the leading edge in that regard. The precious local address will not be interfered with. There will be a new line at the bottom of the envelope, so whatever the precious name of the village or the townland will still be there.

I do not brush aside at all Deputy Colreavy's concerns about privacy and data protection. That is a very important area to Irish people and we have spent a lot of time focused on that issue. I think the Data Protection Commissioner first became involved in this in 2005. All during the procurement process, my Department has been engaged with him and his office in terms of how implementation of the system proposed does not encroach on personal privacy. He has, in turn, let it be known to us that he will be extremely vigilant about discharging his independent function under the law. He has left us in no doubt about that.

Deputy Michael Colreavy

I will do a little further research on that but I understand the practice throughout the EU is that, although the technology is there, the identification potential is not reduced to fewer than a cluster of four or six houses.

The reason I asked for the financial information was that PA Consulting did a report, although I do not have the date for it. However, based on 2007 figures, it lists the implementation costs and the net value over 15 years. Private postal services, banking, retail, telecommunications and insurance are listed. It appears that an agency like An Post will carry a lot of the financial load here. While other areas will see an increase in the value over 15 years, An Post will see a big loss by virtue of the heavy implementation costs. I do not have information from the Minister's Department, so perhaps we could have that information on the establishment cost, the implementation cost, the maintenance cost and the life-cycle cost.

Deputy Pat Rabbitte

The cost of the contract over ten years is €25 million. The two big elements of that are the cost of accessing the GeoDirectory data and the cost of upgrading departmental databases, so that they can exploit the new post code system. Some €8.27 million will be paid to the GeoDirectory. That is money which comes back to the State as the GeoDirectory is a State organisation where the shareholders are the Ordnance Survey of Ireland and An Post. It is one arm of the State giving to another one.

The bigger element of the cost will be the €9.46 million which is the cost of updating the databases in the main Government Departments which have been agitating for this service, such as the Department of Agriculture, Food and the Marine, the Department of Social Protection, the CSO and any organisation which can use it to improve its service, make it more efficient and provide a better service to its clients.

Deputy Colreavy looked for information on the impact of the implementation of a national postcode on An Post. The impact will be a positive one. There will be more business going through An Post as a result. The estimate we have is that it is likely to improve the bottom line of An Post by approximately 2%. That is welcome in the context of the discussion Deputy Moynihan and I just had about the future of the post office.