An Post 'can't afford' postcodes plan

A ROW is brewing between An Post and the Government over who will fund the introduction of the planned postcodes system.

An Post has estimated that switching to postcodes would cost the company over €6 million in start-up expenses alone and it says it cannot afford it.

Communications Minister Noel Dempsey is adamant the system will be implemented, however, and yesterday set January 1, 2008, as the date for its introduction.

A spokesman said last night that no decision had been taken on the funding question, which would be among the issues addressed by the new National Postcode Project Management Board. The board, to be appointed in the coming weeks, will devise a workable system and recommend who should run it and how it should be funded, by the end of this year.

The proposal was recommended to Mr Dempsey by an expert working group but their report, made public yesterday, highlights a number of difficulties in implementing such a postcode system.

It said the existing sorting system used by An Post is superior to the postcode systems used in most other countries in that it can accurately pinpoint the destination of a piece of mail to a defined delivery route rather than a broad area.

The implication is that for any benefit to accrue, a new system would have to be more technologically advanced than anything in use around the world.

The report also throws some doubt on the theory that postcodes would boost business by increasing the volume of direct mail or advertising material. It pointed out that countries with postcode systems have different levels of business.

Mr Dempsey insisted, however, that postcodes would drive business.

"A postcode is a vital piece of infrastructure for a modern developed economy. Without an effective postcode in Ireland, there is a real danger that not only postal operators, but also consumers, business and public services will be at a disadvantage compared to our EU partners," he said.

One of the members of the expert working group, chairman of the Irish Direct Marketing Association

(IDMA), Alex Pigot, estimated postal volumes would increase by 3%-4% per year for the first three or four years after postcodes were introduced.

He rejected the suggestion that the system would result in unwanted junk mail clogging up consumers' letterboxes.

"We are not talking about drowning people in mail. Companies don't want to send mail to people who don't want it and postcodes will help companies target their mail shots more accurately."

A spokeswoman for An Post said the company was not opposed to the introduction of postcodes in principle but said they were not necessary.

"We were happy to be on the working group and we will continue to do whatever is asked of us as the proposal is developed further," she added.

The Communications Workers Union called for a wider public debate on the issues involved.