Passing the reform parcel won’t deliver future for postal service

IT sounds unbelievable but it’s true: Ireland’s system of collecting and delivering post has not changed in 250 years.

While it has grown to cater for the population surge in Dublin in recent years, the fundamental structure of An Post’s operation has remained at a standstill.

One thing which has not remained static is the company’s wage bill. It now stands at a staggering half a billion euro. And it’s rising.

And that is the crux of the An Post problem.

In a world where people send emails, use the internet and have developed new forms of communications, it has failed to change.

And the symptoms of this malaise are clear.

For Finance Minister Brian Cowen and Communications Minister Noel Dempsey, the An Post losses must make for painful reading.

In the last annual report, chief executive Donal Curtin said: “It is vital all the stakeholders in An Post recognise the realities of our current position and work together to face and overcome the challenges that threaten our very existence.”

Unfortunately, the hopes which Mr Curtin expressed in that statement look set to be dashed.

Major reform is needed immediately in the An Post operations.

The company is haemorrhaging money, has three years of operating deficits and accumulated losses of 67m.

The payroll costs of 501m rose 4.5pc. The overtime bill alone is 35m – if it eliminated the cost of the extra hours, it would stand a good chance of making a profit.

Unfortunately, it looks as if the company is heading towards its fourth year of losses.

But the real problem is that radical reform of the workforce is failing to materialise.

An Post management wants to shed 1,450 jobs and an overhaul of the way it collects and delivers letters.

As a result of these proposed changes, there was an industrial dispute in March.

In April, the company and unions failed to report back to the Labour Relations Commission with proposals on reforms. It also missed deadlines in May, July and September.

On a human level, nobody supporting a family and paying a mortgage wants to lose a job or overtime payments.

If they are telling their union representatives to oppose these developments, it is understandable.

At the same time, it is postponing the evil day and not improving matters for any staff members.

Earlier this year, An Post’s management outlined a recovery plan to address the problems at the company.

Included in the package of measures were plans to sell off businesses which were not part of its central functions.

Our story published on this page (see below) details how the company is working on the sale of two firms it owns which retail mobile phone top-ups in Britain and Spain.

If all goes according to plan, these companies could be sold for up to 30m. That is a good dollop of cash by any measure.

Earlier this year, An Post tried to sell its loss-making courier and parcel service, SDS.

Not surprisingly, nobody was interested in purchasing the company due to its heavy losses, and the State-owned group is implementing 270 voluntary redundancies.

There are, however, grounds for believing it will be able to sell its Spanish and British operations. They make money and operate in a growing area.

But these disposals should be carried out in conjunction with real reform of the collection and delivery of mail.

At this rate, the sale of these companies could simply go to pay the overtime bill for An Post workers.

And where is the point in that?