An Post seeks UK deal to cut costs

An Post is in talks with Royal Mail in an effort to improve a deal which has cost the Irish postal system more than 46m in three years.

The Communications Regulator has expressed concerns over the scale of the losses for delivering mail in Ireland on behalf of international postal operators.

It said in a statement it had expressed concerns to An Post that “this matter has not been resolved, given both its importance and the significant adverse financial impact it has onthe finances of An Post”.

It is understood that ComReg could take legal sanction against An Post if it continues toendure heavy losses as a consequence.

In 2001 the deal cost the organisation 19m, last year 13m, in 2003 the estimated costis between 15m and 20m and next year it may cost up to 20m.

An Post deals with 17 international postal organisations, the biggest of which is RoyalMail in Britain.

Under the deal An Post is paid 74pc of its standard stamp rate of 41c in return for making deliveries on behalf of other organisations.

The contract currently means the Irish state organisation is delivering at a loss.

If An Post pulls out of the European-wide deal, it means it would have to conductseparate negotiations with 17 postal organisations.

In a statement yesterday, the European Commission said third-party operators like privatecompanies which are not postal incumbents stand to gain most from the renewal of thedeal.

It added: “This is because today’s decision requires the 17 postal operators that signed the agreement to deliver incoming cross-border mail for those parties on the same terms that they apply among themselves.

“Private operators need to have access to this service since outgoing cross-border mailhas been opened up to competition on January 1, 2003.”