Tag: Government

Royal Mail bosses under pressure for closing profitable branches (UK)

Posted by | Jul 24, 2008 | |

MPs warn in a new report that post offices in pubs and shops could be at risk because of inadequate funding and call for more transparency in the way Royal Mail treats its public subsidy.
Ministers have told Royal Mail to close 2,500 out of 14,000 branches in a bid to cut the network’s annual subsidy by GBP 40million to GBP 150million a year and stem losses running at GBP 4million a week.
However, Paula Vennells, Post Office Limited’s branch network director, told MPs on the Business and Enterprise committee that some of the condemned branches were making money.
She disclosed that 10 profitable branches will be closed during the 18 month-long Network Change Programme – or just over one every six weeks.
The committee’s chairman Peter Luff, who is publishing the report into the financial viability of the post office network, said it “made no sense” to allow profitable post offices to close.
The committee calls on the National Audit Office to investigate the financial arrangements for so-called ‘outreach’ services which Royal Mail is setting up when it has to close branches.
They call for close examination of the relationship between Post Office and its parent company Royal Mail Group after finding that money provided by Royal Mail was not enough for the Post Office to run its services.
The MPs also said Royal Mail should provide “clear information” on what services Royal Mail expects to be provided, how it works out what to pay for them, and how much they actually cost to deliver.
They questioned whether Royal Mail was using the Post Office to “cross-subsidise” some of its mail services. Last year the network received GBP 358 million for providing mail services to Royal Mail.

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Signature of public service agreement 2008-2012 between French state and La Poste

Posted by | Jul 22, 2008 | |

La Poste has signed a public service contract with the French government for the time period 2008-2012 confirming the company’s commitment towards four basic service areas and preparing it for total postal liberalisation in 2011.

The contract, signed by La Poste President Jean-Paul Bailly and the Minister for Economic Affairs Christine Lagarde among others, follows the announcement of possible future partial privatisation of La Poste in 2009 with the government remaining the majority shareholder of the company.

With the new agreement, the public postal operator expects to calm the French unions regarding the modification of the company’s legal structure as they have always strongly opposed opening up La Poste to private investors.

The four main service areas stipulated in the agreement include postal services, transportation and distribution of press, accessibility of banking services for as many clients as possible and nationwide coverage of postal service points.

The postal services mentioned in the contract comprise distribution and delivery of mail 6 days a week with the same tariffs all over France. In addition, the new deal defines some targets for the group such as distributing 83 pct all letters the next-day in 2008. The quantity should rise to 84 pct in 2009 and 85 pct in 2010.

The accessibility of banking services means that every customer has the right to open an account at the postal bank of the company, disregarding the financial resources of the customer.

Nationwide coverage of postal service points guarantees the accessibility of La Poste service points all over France, even in the remotest regions of the country maintaining 17.000 service points nationwide. According to the corresponding law, La Poste has to guarantee that no more than 10 pct of the population in any French department will be more than 5 km away, or at more than 20 minutes distance by car, from a post office.

French trade unions are already preoccupied with the uncertainty around the financing of the plan since neither the cost of the postal distribution service nor the method of financing has been outlined in the contract.

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Commission declares aid to Poste Italiane unlawful and requires recovery

Posted by | Jul 17, 2008 | |

The European Commission has declared unlawful under EC Treaty state aid rules an aid granted to Poste Italiane in the form of excessive renumeration paid by the Italian Treasury for funds collected from Poste Italiane’s customers’ current accounts and deposited with the Treasury as of 2005. Italy did not notify the scheme to the Commission before its implementation so that the aid unlawfully granted must be recovered from Poste Italiane. The Commission’s in-depth investigation, opened in September 2006 (found that the interest rates from the Italian Treasury unduly favoured Poste Italiane. This unlawful aid is liable to give Poste Italiane an unfair advantage over its competitors on the liberalised postal and financial markets in Italy. The scheme which led to this benefit to Poste Italiane was repealed in the Italian budgetary law of 2007.

Poste Italiane was legally obliged to deposit the funds collected from customers’ current accounts with the Italian Treasury.

The Commission’s investigation revealed that the interest rates paid by the Treasury to Poste Italiane from 2005 onwards are:

– higher than what would have been obtained from a private borrower and
– higher than what Poste Italiane would have obtained if it had been free to invest the money on the market.

The Commission concluded that these higher interest rates, which do not conform to market conditions, provided an economic advantage in favour of Poste Italiane and distorted competition and trade within the Single Market.

The Italian budgetary law for 2007 abolished the legal obligation to deposit the funds collected on postal current accounts of private customers with the Treasury and provides that these funds are invested by Poste Italiane in euro area government bonds. The interest paid for these bonds do not contain any state aid as they do not entail any selective advantage.

The non-confidential version of the decision will be made available under the case number C 42/2006 in the State aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State aid Weekly e-News.

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The government may consider privatization or listing of Estonian Post

Posted by | Jul 16, 2008 | |

Meelis Atonen, member of the supervisory board of Eesti Post, told Eesti Päevaleht that the government is well aware of the need that the company needs an international investor since next year the Estonian postal market will be fully liberalised and it could lose its lucrative business.

Atonen did not wish to name any potential buyers. Also Ahti Kallaste, member of the company’s board, did not wish to specify who could be the potential investor and said that the decisions about the company’s future will be made in the middle of August.

The company’s board is also actively considering a plan to list its shares on the Tallinn Stock Exchange.

Eesti Post has recently announced that it plans to sell the building of its former postal office in Tallinn.

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The Postal Regulatory Commission holds hearing on universal service (U.S)

Posted by | Jul 8, 2008 | |

The Postal Regulatory Commission is holding a public hearing on the universal postal service obligation on July 10 from 10am-12pm at its hearing room in Washington, DC.

Testimony from this hearing in addition to other pubic feedback will be used in developing a formal report due to Congress by December 19, on “universal postal service and the postal monopoly in the United States, including the monopoly on mail delivery and access to mailboxes.” The report is a requirement of the Postal Accountability and Enhancement Act of 2006.

According to the PRC, the report will focus on geographic scope, product offerings, access to facilities and services, frequency of delivery, rates and affordability, and quality of services.

The commission has already held field hearings on this topic in Flagstaff, AZ; St. Paul, MN; and Portsmouth, NH.

So far, a number of comments have been submitted to the PRC on the universal service obligation. They can be accessed from the commission’s Web site at prc.gov.

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