Eire - Entrants to postal market may face levy

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A levy is being considered by government for all new private sector entrants to the postal sector, following the liberalisation of the market for general mail.

The market for mail of 50 grams or smaller was supposed to have opened on January 1, but this has been held up because of a delay in progressing the Postal Services Bill, due to be debated in the Dáil this week.

The government has been considering how to fund the postal services while also retaining the universal service obligation.

This is a legal obligation under which all citizens in the state are guaranteed equal access to the postal service.

The Communications Workers Union (CWU),which represents 10,000 An Post workers, told an Oireachtas committee last year that if it was not handled properly liberalisation could lead to widespread job losses and put the universal service obligation under severe strain.

The EU’s third postal directive provides for state aid to be included as a funding option. But this is considered unlikely in the current climate, with the most likely option being a levy on new entrants to the sector.

In such a scenario, a levy would have to reflect the level at which a private company entered the postal market.

It might work in tandem with a separate set of charges levied by An Post for the use of its mail centres, or other elements of its network.

Private entrants to the market are expected to be given access to services at An Post’s four heavily-automated and modernised mail centres, where most mail is sorted and processed.

The price of this access would be proposed by An Post, but almost certainly approved by ComReg, the communications regulator.