An Post warns of job losses if fined €12m for not delivering mail on time
AN POST is being sued by the telecoms watchdog for not delivering enough letters on time.
It is facing a fine of up to €12m after the regulator launched the legal action.
The semi-state mail firm warned last night the case may result in job losses among its 9,000 staff and push up the price of postage for consumers.
The company, which handles 2.5 million items of mail every day, last night claimed the move by ComReg could "seriously damage the financial stability" of An Post.
It added that it only heard of the legal case two days ago but vowed it would "contest this action vigorously".
The Communications Workers Union (CWU) described the €12m potential fine as "an outrageous and wasteful attack by an unaccountable quango against An Post and the Irish postal service that will result in the loss of thousands of jobs".
ComReg yesterday confirmed it had begun legal proceedings against An Post over failing to meet next-day delivery targets of 94pc.
The targets were set in 2004.
According to the latest monitoring survey commissioned by the regulator, just 84pc of ordinary mail handled by An Post made the next-day delivery target in the first nine months of 2011.
However, An Post last night said it had repeatedly sought "clarification and increased transparency" on how the regulator monitors mail delivery.
Any major fine could push An Post from a profit-making company into the red. It is expected to record an operating profit of about €2m in 2011 -- down from €5.8m in 2010.
The volume of mail handled by An Post has slumped by around a quarter -- the equivalent of around 200 million less items of mail and €100m less in revenue generated for the firm -- since the height of the boom in 2007.
Martin Ferris, Sinn Fein's spokesman on communications, said he was "highly suspicious" of the move amid increased debate over the privatisation of some public sector companies.
The commercial semi-state firm stated it was "puzzled" that the regulator was taking action at a time when the mail firm faced challenges from the economic downturn and failing mail volumes.
"We believe this course of legal action flies in the face of the company's commitment to quality of service and could seriously damage the financial stability of An Post," the spokeswoman said.
The firm said it was determined to meet the 94pc target and pointed out the volume of mail successfully delivered the next day has climbed from 72pc in 2004 to 84pc.
"It is worth noting that ComReg will not be liable for the costs of this legal action even if they lose," Steve Fitzpatrick of the CWU said last night.
"Whatever the outcome, An Post will be stuck with a massive legal bill.
"The regulator refuses to share information with An Post on where its service levels are deemed not to be meeting its expectations," he added.
"Furthermore, Comreg samples just 30pc of postal deliveries and completely ignores bulk mail which now accounts for most of An Post business mail services."