An Post wants 30% rise in international rates

An Post is believed to have sought a rise of about 30 per cent in international postal rates.

If granted by the telecoms regulator, Ms Etain Doyle, the rise will be absorbed by commercial customers mostly, who make up more than 75 per cent of the market. It will also hit foreign post offices, who pay fees to An Post to deliver mail sent from their markets.

Early drafts of the group's application for an increase are understood to have referred to a rise of up to 60 per cent, but an informed person said that had been revised. While a 60 per cent rise was cited in papers presented to the Department of Public Enterprise, these were "redrafted and reworked".

Postal rates have not increased since 1991 and the group's submission to Ms Doyle, who regulates its business, is understood to have said that it is incurring losses across much of its international postal business.

This is in addition to a financial crisis in its post office network, which is projected to lose up to £80 million (€102 million) by 2005. The Government sanctioned a plan last week to prevent those losses, though it was condemned by the Irish Postmasters' Union.

The Government rejected An Post's demand for a State subvention to keep rural offices open.

International postal rates are calculated according to weight of mail, the distance to be carried and the priority it is to receive in the system.

An Post is understood to have told Ms Doyle that the losses are being incurred in its mail business to large overseas markets. This is because the rates charged by post offices to deliver each other's mail - known as "terminal dues" - are set according to prices in the offices' domestic market.

This means An Post must pay "high" rates to the postal service in Germany, for example, because rates there are high, but can charge it only the "low" rates that apply in the Republic.

It is understood An Post claims its tariffs are the third-lowest in Europe. It also says its costs are rising, due to national pay agreements.

International mail is a major element of An Post's postal business. Between outgoing and incoming mail, the international business accounts for about 28 per cent of the trade. Some 17 per cent of the total postal business is for mail arriving into the State. About 11 per cent is post leaving the State.