There seem to be two unwritten rules concerning the operations of An Post; the State-owned company is destined to sink into ever increasing losses and very little, very late is being done about it.
It is a company which is under attack from all around with increased costs, inefficiencies, greater competition and Brussels-lead deregulation. Meanwhile its sole shareholder - the Government - does nothing.
An Post is heading for a loss of €30 million this year, more than four times last year's deficit. The increased losses are due in part to the economic downturn but another factor is the lack of an increase in postal rates for nearly 11 years. It is quite bizarre that a company with a mandate to operate commercially can be denied a price increase for over a decade.
At the same time, An Post's failure to implement a cost-cutting plan which was agreed with staff has also impacted on the finances. The plan was to give employees 14.9 per cent of the shares in the company in exchange for cost savings of €34 million over three years; last year the savings achieved were worth only €0.6 million. The company's largest depot in west Dublin is in urgent need of working practice reform, especially on overtime payments, but a plan for annualised hours was rejected last year.
However, the problem of the 1,800 sub-post offices is even more intractable. An Post has 1,000 offices which handle almost 95 per cent of the company's business. Then there is a further 800 or so, urban and rural, which handle five per cent of the business. In the view of An Post these offices do not have the volume of business to make them viable and this is a view shared by the Flynn group in its study. It is anticipated that maintaining the offices will lose €100 million by 2005. An Post has a mandate to operate on commercial lines; if the government will not subsidise the offices then, not surprisingly, it wishes to close them. The Government has refused a subsidy and has called on the banks to give direct financial support to the post offices. That will have given bankers their biggest laugh of the year. There can be no doubt about their response.
But while the issue of the sub-post offices drags on, the company's finances are deteriorating rapidly. An increase on postal charges is warranted and inevitable; there should be no further procrastination. At the same time, the company must increase the pace of change in work practices. When the cost of postage goes up, the public will need to know that efficiency is being rewarded with the increases and that inefficiency is not being subsidised.