An Post favours partner for lottery bid

An Post’s incoming chairman indicated yesterday that he believes the State company should work with a partner if it bids to keep its agency to operate the National Lottery.

The Dáil has passed legislation that will allow the Government to sell a 20-year licence to operate the National Lottery, potentially ending An Post’s 26 years as its operator, unless it bids for the licence.

Appearing before the Oireachtas Joint Committee on Transport and Communications , An Post’s chairman designate, Christoph Mueller, said that the €2.6 million earned by the company for operating the lottery last year was “very important” to it.

However, he said that if the Government were to make a 20-year licence available, it would be prohibitive for An Post to get it alone.

The Government has yet to seek bids for the licence, but An Post has already said that it plans to join the race to operate the lottery. Italian operator G-Tech has been named as the possible partner.

Upfront payment
The State is going to seek a large upfront payment from the successful bidder. Some reports estimate the licence could cost €600 million to secure.

An Post’s recently published annual report shows that the company lost over €39 million last year, €17 million of which was directly attributable to its operations.

Mr Mueller told the committee that the group’s biggest loss-maker was the “last mile”, that is, the final leg of its postal delivery service.

Last week, its chief executive, Donal Connell, said that its public-service operations, cost an “unsustainable” €60 million.

The group is seeking permission from industry regulator, ComReg, to increase the cost of stamps.

Mr Mueller, who is chief executive of Aer Lingus, warned that An Post had to tackle the problem of maintaining delivery services while keeping them affordable for its customers.

Post codes
He suggested that post codes could be part of the solution. Responding to questions from committee members, he told them that he favoured their introduction to the Republic as they would help to cut costs.

He pointed out that the absence of such codes could create difficulties for items being posted from outside the State and delay them from reaching the last mile in the first place.

Mr Mueller refused to discuss Mr Connell’s €438,000 pay deal from the company last year on the grounds that it would not be appropriate to do so as he is not yet chairman.