Bill will allow private operators to enter mail delivery market

LEGISLATION allowing private sector operators other than An Post to process and deliver ordinary mail “down to the smallest letter or postcard” has been introduced in the Dáil.

Minister for Communications Eamon Ryan said that previously the market had been opened “but just for larger parcels and heavier packages”. But the new Communications Regulation (Postal Services) Bill 2011 “provides for a more open, competitive market across all mail volumes”. The Bill’s provisions also include a five-year freeze on the price of stamps. The Minister said “we have a wider public interest that we look to protect and do so with the provision of a universal service obligation”.

They were legislating for the market “to be fair. It will not allow someone to come in, cherry-pick the easier, more profitable routes, and see a very high and unfair burden in the cost of providing that universal service in other areas. If it can be shown that there is such unfair competition or unfair use of the universal service obligation, there is a mechanism” to “levy an income from the industry”.

Fine Gael broadly welcomed the legislation but the party’s communications spokesman, Leo Varadkar, warned that “badly managed competition and poor regulation could give rise to cherry-picking and a race to the bottom as regards the terms and conditions of employees in the broader sector. It could also undermine the universal service obligation which guarantees every home and business a postal delivery service for five days each week.” He said that “a further risk arising from badly managed competition is that it may turn a profitable State company, An Post, into a loss-making entity in need of support”.

Given that “An Post has never required a bailout or hand-out from the State or taxpayer, the Oireachtas would not do a good job if it were to enact legislation that resulted in the company becoming unprofitable and, notwithstanding any transfers from private sector operators, end up requiring State cash to continue to perform its functions”. The Bill transposes the third and final EU directive on liberalisation into Irish law, but Labour spokeswoman Liz McManus expressed concern that “unless amended it may put undue strain on an essential public service”.

She said the Bill “presumes that a market solution for postal services is always progressive. However, the one-size-fits-all approach devised by the EU has had mixed effects in different countries. In some cases, far from improving the service, it has led to deterioration, job losses and the undermining of equal access.

Martin Ferris (SF, Kerry North) said the legislation “will open up this vital service to private companies who will inevitably rule out operating in isolated non profitable areas. This will lead to the loss of a vital public service for thousands of rural people and an end to An Post as we know it.” Mr Ferris said the Bill “claims to protect the universal service obligation. That claim is not worth the paper it is written on.”