An Post, which up until recently could not pay the terms of Sustaining Progress, intends to spend €30 million next year on upgrading its security systems and renovating its buildings.
This year the company spent about €7 million on capital projects, but according to estimates submitted to the Department of Finance the company will spend €30 million in 2006. This represents an increase of more than 300 per cent.
A spokeswoman for the company said about €15 million was earmarked for a major security upgrade to the retail operations of the company. This will involve installing new security features, including CCTV and alarms, in many of the company's 1,614 post offices. An Post said it was responding to increased threats to some of its post offices, particularly in isolated rural areas.
The remainder of the funds will be used to upgrade regional offices, extend some mail centres and bring in fresh IT equipment. One of the reasons for this is that An Post is trying to re-integrate the parcels business SDS back into its core mail operation. This operation was closed last year.
An Post rejected suggestions that recent clashes with the Communication Worker's Union (CWU) could make this the wrong time to be making investments of this size. "This is an investment for everyone in the company," said the spokeswoman.
The board of An Post last week accepted a Labour Court recommendation aimed at resolving a long-running dispute at the company which had threatened to disrupt postal services in the run up to Christmas.
Under the Labour Court recommendation, around 8,500 members of the CWU will receive outstanding pay increases due under the Sustaining Progress agreement without conditions. An Post had previously sought to link the payment of the increases to reform in its collection and delivery operations with a view to reducing overtime costs.
The company posted turnover in 2004 of €750 million and a €7 million pre-tax profit. It has been accused of over stating its financial problems, but senior executives claim that if An Post had paid the full terms of national agreements over the last year the company's finances would have gone back into the red.
The company also argues that An Post needs to deal with long-term embedded costs and face up to a new era of competition.
From next year private companies will be able to distribute letters weighing more than 50g and ordinary letter post will be open to competition in 2009. The Minister for Communications, Noel Dempsey, recently warned he would bring forward the date of full liberalisation if the problems at An Post were not sorted out.
