The Minister for Communications, Mr Ahern, has expressed increasing concern about the deteriorating financial position in An Post, it is understood.
With the State postal company expected next month to disclose day-to-day losses of €20 million last year, Mr Ahern is believed to have called for monthly meetings between his Department and An Post to monitor the financial situation.
The company has started a reform programme, but it is understood that a slippage in targets has led informed observers in Government circles to speak of "amber warning lights" in the company.
An Post's spokesman declined to comment.
In addition to the day-to-day losses, the company is understood to have taken an exceptional charge of €50 million to pay for the transformation programme.
This contributed to a €100 million drop in the company's cash reserve to €50 million, an area of significant concern for officials monitoring the company.
While An Post will generate savings when 1,180 people will leave the company, each of its business divisions are losing money. According to one informed individual, there is serious concern about the SDS parcels and courier division, where losses have increased due to the economic downturn. This division is believed to be particularly vulnerable to competition.
The company has said it will return to a break-even position by the end of the year, but it is believed there is concern in Government and official circles that transformation targets were not being met.
These matters are thought to have been discussed at separate scheduled meetings last week between Mr Ahern and the An Post chief executive, Mr John Hynes, and its chairwoman, Ms Margaret McGinley.
Mr Hynes retires this summer after leading the company since 1990. It is believed that preliminary interviews have already been conducted with a number of internal and external candidates.
A decision is expected at the end of April, around the same time as the company publishes its annual report.
Mr Ahern's Department is believed to have written to the company last November, citing concern about the financial situation. This led to the initiation in recent months of regular monitoring meetings, similar to those at RTÉ last year in advance of an increase in the broadcaster's licence fee.
"What we're talking about here is the strategic focus of the company," said one person, who added that there was concern that the situation in An Post might deteriorate. "This year is going to be very tough for the company."
The €20 million operating loss in 2002 follows a €6.7 million loss before taxation in 2001, its first since 1991. This compared with a €9.8 million profit in 2000.
With An Post's monopoly postal business set to diminish as the market opens to competition, attempts to reform the business have been dogged by industrial relations and technical difficulties and regulatory hurdles.
The communications regulator, CommReg, is assessing a proposal by An Post to deliver post to outdoor letter boxes in an move to speed up deliveries in rural and urban areas.
While the company believes it could make annual savings of up to €35 million through the use of such a system, the introduction of up to 500,000 letter boxes with locks is projected to cost about €30 million.
Given the decline in the company's reserves, such expenditure could expose the company to further vulnerability if the savings were not realised.
