Can this man make An Post shine again

Donal Curtin is tipped to lead the state-owned operation but he will need to live up to his tough image to deliver the goods, write Jane Suiter and Ruth O'Callaghan.

When Tadhg O'Donoghue, chairman of the ESB, told Donal Curtin in June 2001 that his plan to expand operations into Poland through the acquisition of eight electricity supply plants for Euro 1.7 billion had been shot down by Charlie McCreevy, the head of the company's international division was more than a little taken aback. "He was incandescent with rage," says one person familiar with the situation.

Curtin, 55, is a man who usually gets his own way and won't accept second best. He has also emerged as favourite to succeed John Hynes as chief executive of An Post, the embattled state-owned post office. His appointment has still not been finalised by the company's directors and the company will only confirm that the board has agreed to open negotiations with a "preferred" candidate.

The scale of the task facing the new boss should not be underestimated.

The post office is making huge losses and ran up a deficit of Euro 70m in 2002 on its Euro 650m-plus turnover. It has already spent its cash reserves on massive restructuring which cost Euro 50m. Even though 1,140 employees from the 9,500-strong workforce are facing redundancy or redeployment, company sources say that much more needs to be done if the business is to be knocked into shape.

The emergence of Curtin as the frontrunner has come as a surprise in some quarters. As recently as a month ago it was understood that Eamonn Ryan, the managing director of post offices at An Post, was set for the top job even though his appointment would have split the An Post board.

The Sunday Times reported that the Communications Workers' Union, which represents 90% of An Post employees, opposed the appointment of Ryan on the basis that he did not enjoy a good relationship with the unions. Three of the four An Post worker directors are members of the union.

Curtin left ESB, the state-owned electricity giant, last year after his failure to secure the chief executive post which became vacant following the retirement of Ken O'Hara. The post went to Padraig McManus even though Curtin had the support of Joe LaCumbre, an influential ESB worker director, and Larry Donald, the former company secretary.

Curtin is described by former ESB colleagues as "driven, determined and focused" but they caution that these qualities often come across as overbearing.

"He is not the type of manager you generally find in a semi-state operation," says one former colleague. "But he is a shrewd operator who is willing to take projects, run with them and drive them through."

One such project was the telecom joint venture between BT and the ESB-owned Ocean which netted the electricity supplier Euro 165m when it sold its stake to the British company.

Despite his success in developing ESB's international business and the skill he has shown in negotiating his way around Northern Ireland, Saudi Arabia and large parts of Asia, Curtin's supporters wonder whether the Cork-born engineer will have enough strategic fuel in the tank to undertake the journey required to bring An Post into the 21st century.

"He is hugely involved in the detail and very focused on results," says another former colleague. "Doing all the political groundwork and keeping an eye on the big picture will be the challenge."

Last year, An Post was berated for failing to deliver millions of cards in time for Christmas, but the problems are visible throughout the organisation.

Post Office Counters seem to exist somewhere between the 19th and 20th centuries; SDS, the parcel delivery business, loses money despite having a 40% market share; there are question marks over An Post's efficiency in collecting television licence fees; the national lottery has lost its sparkle and a threat hangs over the company's monopoly control of social welfare payments.

As starting positions go they don't get much worse. But before the new chief executive can tackle these issues there is the question of what to do with 500,000 unwanted letter boxes. These boxes, designed to sit at the end of roads, so avoiding the necessity of delivering mail to every home in rural Ireland, were bought by the company without government approval and in defiance of ComReg, the industry's regulator.

Even the core area of Post Office Counters is losing money – despite a tie-in with AIB. Critics point to restrictive work practices, the absence of ATMs, the inability of customers to use plastic and the closure of many offices at lunchtime as proof of the scale of the challenges facing the new chief executive.

The issue of restructuring the post office network is politically charged as exemplified in the case of Dolores McManus. She is the sole operator of a tiny sub-post office in Doocastle, Co Sligo. Its catchment area has 150 houses, two pubs – one with a shop – two garages and a church. The national school closed down two years ago.

In the 1990s, McManus was asked if she would accept voluntary redundancy as part of a cost-cutting measure to close offices where only a tiny amount of An Post's business was being carried out. She said no. She has run the office since the age of 18, when she took over from her mother.

"It's really in my blood," she says. Monday to Friday she works 8am to 5.30pm, with an hour for lunch. On Saturdays, it is open from 9am to 1pm.

She's not doing it for the money. Out of an estimated 1,720 sub-offices still open in Ireland, more than 500 are earning less than Euro 13,000 a year, according to the Postmasters' Union, the post workers' representative body. A further 110 offices subsist on a minimum payment of Euro 8,000 from An Post.

John Kane, general secretary of the Postmasters' Union, says the union is fighting for increased wages and wants to see as many offices "as humanly possible" stay open. But the fact that An Post can't afford them and European Union competition rules say the government can't subsidise them, is a problem.

Simon Coveney, the Fine Gael spokesman on communications, wants An Post to appear before the Oireachtas committee on communications to detail and justify its cost-cutting plans. "The company would be well advised to outline the plans to politicians to ensure that the downgrading of post offices is justified and will ensure the cost savings the company states and to have the politicians onside," he says.

Hynes, the outgoing chief executive, outraged politicians earlier this year when he refused to appear before the committee.

The other pressing issue is deregulation. An Post's monopoly postal business is set to diminish as the market opens to competition under EU rules. Liberalisation started in 2000 and at the moment all deliveries weighing more than 100g or costing more than three times the price of a standard letter are facing competition. This is about 35% of An Post's total revenue. New regulations to be introduced in January will expose about 45% of its deliveries to competition, rising to 55% in 2006 with the possibility of full deregulation by the end of 2008.

Mussolini gained his reputation by making the trains run on time. The new boss of An Post will gain instant credibility if his employees can deliver the Christmas post on time.