An Post retains €7bn social welfare contract

AN POST can keep its government contract to distribute more than €7 billion a year in social welfare payments, the European Court of Justice has ruled.

A US multinational complained that the state had broken EU law by awarding the lucrative contract to the state-owned An Post without putting it out to tender.

But the court found that the European Commission, who took the action, had not produced enough evidence to support its case. The Government could be open to a further challenge if it does not change the way it awards contracts.

But for now An Post can continue to pay out to about 900,000 customers a year and earn €52 million annually for doing so.

An Post welcomed the decision and said that the contract is the backbone of its business. “It accounts for a third of our business, and the number of people it brings into our post offices is an even greater contribution”, said spokeswoman Angus Laverty.

The contract ran out in 2002, and pending yesterday’s judgment An Post continued to handle the payments on the state’s behalf. They include all social welfare payments from disability, unemployment, old age pensions to children’s allowances.

Independent MEP Marian Harkin warned, however, that a more effectively mounted case by the commission could secure a different outcome in the future.

“The future of our rural post offices in particular will be at risk if An Post loses the social welfare contract in the future, and there is an urgent need to evaluate today’s judgement to assess the threat which could emerge should the European Commission mount a more effective challenge in the future,” said Ms Harkin.

Labour MEP Proinsias De Rossa points out that the court simply found that the commission did not present sufficient evidence to support its case.

There is no EU level legislation that deals with the provision of public services. Instead, he said, vital issues, such as social welfare payments, are seen in the same light as a contract for any ordinary product or service.

“It is not acceptable that under existing European law, as decided in this case by national governments, the commission was solely concerned with the advertising of the contract, and that it was largely silent on the obligations of entities like An Post which provide a public service to citizens.”

Fianna Fáil MEP Brian Crowley said the Government was now free to continue to give the contract to An Post in the future.

“This is good news for An Post and for rural Ireland,” said Mr Crowley.