The Minister for Communications, Eamon Ryan, has announced the Government is to introduce a national postal code system from 2011.
Speaking this morning, Mr Ryan said such a system was necessary for the economic development of the country and would save money for the State as a major postal customer.
"We can't afford not to do it, we need to move to a new digital economy. Postcodes are part of that, they actually make for a more efficient postal system . . . they also give you a location for a whole range of services which makes it easier to find where you want to go to in Ireland, and to get things done effectively and quickly.
"There are small upfront costs, but the returns across the economy are, in my mind, massive."
Noting Ireland was the only country in Europe that did not have a postal code, the Minister conceded there was "slight nostalgia thing" over this, but he added: "The reality is it's not efficient, it doesn't work well. It's far more effective for us to have a specific address for each house, for each area, which is a mix of numbers and letters, and that allows post get there much more quickly, much more effectively.
Pointing out a new system could operate as a locational code system," Mr Ryan said: "For example, if you're going to fix a lamppost, you can actually put a location code based on the same postal code system, so you know exactly where it is."
The Department of Communications, Energy and Natural Resources said a report from PA Consulting put the monetary benefits of postcodes to the State at €22 million in the medium term due to cross-departmental sharing of information - but that most of the benefits of such a type of system "cannot be accurately gauged in monetary terms".
The Department said data gathered would allow the Government match demographic trends to its policy making for planning in areas such as health, education, and housing, and would assist emergency services in reaching locations.
Speaking on RTÉ's Morning Ireland, Mr Ryan said there was an estimated set-up cost of €10 million to €15 million required to allocate a code to every house and area and to feed this data into a computer system. This would take a year, but the system would bring an "immediate return" in terms of more efficient and effective service, Mr Ryan said.
"I think, actually, for a lot of rural Ireland, this is a real opportunity that you can start buying things through the internet, get them to your house in a much more efficient way. I think it is part of our modern infrastructure and we need it now."
The Minister said the Revenue Commissioners estimated it could save €2 million or €3 million a year.
A spokeswoman for An Post said a new postcode would be a "major piece of national infrastructure" that would have "implications for every person in the State".
She said An Post was not against postcodes but noted the company already had a "very complex code" in its GeoDirectory national sorting directory, and this database was also used by commercial interests and local authorities. "Our system suits our processing and delivery. . . this [the new system] is an alternative, a different kind of postal system."
The spokeswoman said An Post had been actively involved in the work of the expert group on the issue for the past three years and would continue to do so, and looked forward to hearing more on the latest proposals.
Simon Ensor, spokesman for the Irish Auctioneers & Valuers Institute (IAVI), said the IAVI was awaiting further details on the proposal but would question whether this was the time to spend €10 million to €15 million "on something that isn't a matter of great urgency".
He said his organisation would would welcome a new system if it improved the postal service but that people's response would be "less than enthusiastic" if their postcode changed out of all recognition.
However, Mr Ensor said: "If Dublin 4 boundaries remain broadly similar, the new postcode will in itself start becoming the prestigious postcode . . . what makes a postcode more valuable than others to a huge extent is the infrastructure of that location . . . its convenience and location. Those aren't going to change. They [postcodes] are just going to become a little more difficult to identify in the short term, but people will get used to them."
The Irish Exporters' Association (IEA) today welcomed the Minister's announcement.
The organisation's chief executive, John Whelan, called for the latest technology to be utilised in the new system. "There is opportunity for Ireland in coming late to the modern post code system to jump ahead of other countries who have for many years being using the post code system."
“The current postal system is inefficient and is believed to be adding 20 per cent to 30 per cent to the sorting [and] routing costs in An Post. Hence, it should be possible to introduce the system in a cost-neutral way, offsetting capital cost with current operating savings.”
Mr Whelan added that the new system would give An Post a new range of marketing tools to consumers and industry. "There are a lot of corporations internationally who would be very anxious to piggyback on the back of the new system once it's in," he said.
The Department said it was envisaged that an alpha-numeric postal system (ABC 123) would be used to identify clusters of houses. This would read, for example, as Ms A Murphy, Blue Building, Pearse Street D02 123 or Mr B Collins, Main Street, Athlone, ATH 123.
However, the precise design of the new codes will not be finalised until the tender process is complete.
Liz McManus, Labour spokeswoman on communications, questioned why the Minister was spending money on a scheme that had "limited" benefits.
"In principle, I support the introduction of postcodes. But I am concerned at a time of severe cutbacks in public spending that it is hard to justify on the grounds of cost. Estimates have ranged from the Minister's figure of €15 million to industry experts quoting a figure of €25 million. At a time when there is no money in the kitty for the potentially life-saving €10 million cervical cancer vaccine, questions have to be raised as to why we are going ahead with this scheme?"
"There is also a concern that the introduction of postcodes will increase the use of junk mail, and will result in more sophisticated targeting of junk mail to particular income groups."
Postcodes may also be resisted by people who are attached to existing addresses, or who are concerned the new system would influence prestige, house prices and insurance costs.
In 2005, former Minister for Communications Noel Dempsey announced Ireland was to introduce postcodes by January 1st 2008.
