Reasonable and regular price rises are essential if An Post is to meet its statutory obligations as a universal service provider, according to its chief executive Mr John Hynes.
"This company has to be able to secure adequate price increases for its products. Without a return on investment, there won't be any investment which will lead to stagnation and falling standards which Irish business cannot and will not tolerate," said Mr Hynes at the opening of the new extension to An Post's Dublin Mail Centre.
The existence of a significant cash surplus which could cushion losses for some time was being quoted by the regulator as a reason why price rises could be delayed, he said. Using cash in this manner would come at the expense of essential investment and future benefits for customers, shareholders and staff, Mr Hynes added. He described the regulatory regime as unsympathetic and said it frustrated its commercial mandate.
Investments and developments had been achieved on postal prices which had not changed since 1991, he said. But he said An Post, which made a loss last year, was now in difficulty and faced further problems this year. It has projected a €37 million deficit this year and said losses in 2003 would reach €25 million.
Speaking after the opening, the Minister for Public Enterprise, Ms O'Rourke, said responsibility for price rises lay totally with the regulator. "It is not in the Department's hands," she said.
The regulator, Ms Etain Doyle, said her office was reviewing An Post's application for a price rise along with comments in response to the paper it issued in January seeking submissions from all parties on a price rise. "We have indicated there was a need for an increase," she added.
As part of cost savings, An Post announced last month plans to cut 1,140 staff from its workforce of 14,000 by the end of 2003. At the time, Communications Workers Union (CWU) general secretary Mr Con Scanlon said he was surprised at the disclosure of job cuts by An Post and that the union had made no agreement on the level of redundancies.
Ms O'Rourke said: "I have talked to both An Post informally and CWU informally but I am hopeful that with a common purpose they can work through their difficulties. I am satisfied there is a level of consultation. I'd like to see more engagement but I hope that will come."
In a separate development, An Post's personal finance services subsidiary, One Direct, said it would create more than 30 new jobs at its operations centre in Athlone. One Direct, which was set up in 1999, employs 80 people.
