Michael Moynihan (Cork North West, Fianna Fail)
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4. To ask the Minister for Communications, Energy and Natural Resources if his attention has been drawn to the concerns expressed by freight transport companies here surrounding the launch of Eircode; the costs surrounding Eircode; when the post code will be operational; and if he will make a statement on the matter. [47397/14]

Michael Moynihan (Cork North West, Fianna Fail)
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Is the Minister of State aware of the concerns expressed by some of the freight transport companies surrounding the launch of the Eircode? Will he outline the costs surrounding implementation of that code and how it will be operated, and make a statement on the matter?

Joe McHugh (Donegal North East, Fine Gael)
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10 o’clock

I thank the Deputy for the question. The Eircode postcode has been designed, inter alia, to manage challenges around finding addresses in Ireland, specifically the fact that more than 35% of addresses are not unique. This issue underpins the solution adopted which will assign a unique seven-digit alphanumeric identifier to each address. The first three characters of the code, called a routing key, will be used to help sort mail, but it is not directly linked to counties, towns or other geographic features. A routing key will be shared by a number of properties in an area, and will become familiar, rather like the prefix on landline phone numbers.

The second part of the Eircode postcode, the unique identifier, has four characters drawn from a carefully selected set of letters and numbers that identify each address. The Eircode design has a flexible structure with plenty of spare capacity. That means that it is future-proofed to allow for changes to buildings and new developments. There has been widespread support from public sector bodies and private businesses, with particular interest from the retail and financial industries, for the introduction of postcodes nationally. For example, Nightline, Ireland’s biggest independent logistics firm, is fully supportive of the introduction of Eircode. In addition, the emergency services and, in particular, the National Ambulance Service, have welcomed the introduction of Eircode as the codes will facilitate the speedier deployment of its services.

The Freight Transport Association of Ireland and other bodies, as the Deputy has pointed out, have expressed concerns over the non-sequenced nature of Eircode. A sequential design has a number of drawbacks, including the potential to lead to the inability to assign a sequential Eircode postcode to new builds and to cope with the expansion in the number of addresses in the future. The cost to the Exchequer of the national postcode system over the ten-year cycle of the contract is expected to be €27 million, excluding VAT, with costs covering design, database upgrades, media and postcode distribution.

An extensive public information campaign will commence early next year to inform the public about Eircode postcodes and promote their use. This will include outreach activities to ensure the public, especially the vulnerable and hard-to-reach, obtain information on Eircode in a timely manner. Eircode postcodes are expected to be launched by the middle of next year when every household and business in the country will receive a letter containing their postcode.

Michael Moynihan (Cork North West, Fianna Fail)
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I thank the Minister of State. There is major concern among some freight transport companies. In recent weeks there have been conflicting reports about the cost to the Exchequer of the setting up of Eircode. The cost of outside consultants, which will be about 6% of the overall budget, was discussed at a committee. When the figures were added up, it equated to a total cost of €50 million. It was also said the cost would be only €27 million. The Minister of State might outline the exact costs incurred in regard to setting up postcodes. What figures refer to outside consultants? What is the overall cost? Is it €27 million, €50 million or €55 million? A cost of €87 million was also mentioned.

Joe McHugh (Donegal North East, Fine Gael)
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The cost to the Exchequer of the national Eircode system over the ten-year cycle of the contract is expected to be €27 million, excluding VAT, with costs covering design, database upgrades, media and postcode distribution. The cost of the contract will be €16 million over the first two years and a further €1.2 million per annum for the remaining eight years of the contract. The bulk of the cost can be attributed to the dissemination and communications processes. The cost of designing the Eircode postcodes and associated databases is not a significant component of the overall cost.

Capita, the company employed, has been paid €3.22 million, including VAT, to date on foot of delivery of agreed milestones. For further clarification, consultancy costs from 2010 to 2014 were €1.12797 million. PA Consulting received €941,000, including VAT, Mason Hayes & Curran received €141,000, including VAT, while other consultants received €44,000. The Deputy referred specifically to costs. On the cost to businesses and SMEs from the introduction of Eircode, Eircode postcodes will be made available to a variety of business users who can avail of the postcodes free of charge for a limited number of look-ups per day, approximately 15, from a dedicated website.

Michael Moynihan (Cork North West, Fianna Fail)
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Officials said the cost of outside consultants was about 6% of the total cost. The Minister of State gave a figure of €3.22 million in regard to the delivery of the contract and gave other figures of €1.2 million. If €3.2 million is 6% of the overall budget, it would equate to a budget of over €50 million. Figures have been bandied around. For clarification, can the Minister of State confirm that every cent being used by the State to produce the Eircode postcodes leads to a grand total of €27 million? Are other costs not showing up?

Joe McHugh (Donegal North East, Fine Gael)
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Rather than repeat what I said in my reply, I will revert to my officials. If there are other costs or ancillary costs, I will get the officials from the Department to shed more light on them. The important point about costs is something on which all Departments have to be focused, namely, efficiency. There is a lot of engagement with An Post, for example, in terms of data. It has a geodirectory and information systems. Where there are efficiencies and savings can be made, there is no doubt that the Minister, Deputy White, will ensure that will be done. If there are ancillary costs and a further breakdown other than the information available here, I will get officials to get in touch with the Deputy directly.