€30m state funding for An Post

€30m state funding for An Post

The Irish Government has approved €30m state funding for An Post to help sustain the post office network and maintain a five-day postal delivery service and expand to a six-day parcel service.

In a statement issued yesterday (21 November), the Department for Communications, Climate Action and Environment said: “The funding will be subject to stringent conditions and Key Performance Indicators, the delivery of which will be monitored on a monthly basis. Financing will be provided in the form of a repayable long-term loan.”

The statement added: “The funding will inject the financial support urgently required to protect the future of the post office network and to substantially change and modernize the business model of An Post in the coming years against the backdrop of a systemic global decline in mail volumes.

“It will allow the national postal provider to directly respond to the long term changes in the postal market brought about by an increased use of e-mail and the seismic advancement of on-line payment services.”

Denis Naughten, the Minister for Communications, Climate Action and Environment, said: “I have taken a very proactive approach to An Post since becoming Minister. Last year when presented with the stark financial facts at An Post I acted quickly by repealing the price cap enabling An Post to increase the price of the stamp. The main impact of this measure has been to avoid a cash crunch in 2017 and reduce the level of losses expected to be incurred for the year by the company. It also allowed the company time to construct a modernization plan. However without further remedial action, losses for the Group will simply keep going.”

An Post issued its own statement welcoming the government decision, and outlining the “significant actions” which it says it has already taken to “resolve the financial situation”.

The company statement said these actions include:

  • The implementation of cost-reflective pricing of mails in line with European averages.
  • The re-launch and re-specification of the parcels business with evening and Saturday deliveries and later cut-off times for next-day delivery.
  • The reduction in headcount of 316 FTEs by end-December 2017.
  • The downsizing of the management team and restructuring of the business into two new distinct businesses:  An Post Mails and Parcels and An Post Retail (Post Offices).
  • Advanced negotiations with the Irish Postmasters Union on the future of the Post Office network.

An Post’s CEO, David McRedmond, commented: “The Company is facing into extraordinary challenges but by working collaboratively with all stakeholders including Government, Unions and Staff, we have already achieved a very significant turnaround in 2017. Much work remains to be done but with continued momentum and Government support, we will see the development of two great companies, An Post Mails & Parcels and An Post Retail in the years ahead.

“An Post is moving in the right direction in becoming the logistics backbone of e-commerce in Ireland while providing new and traditional services for every community in the State.”

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