*hereinafter referred to as "the Post Office"
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CONTENTS
Preamble
Section I: Strategic missions and orientations
Article 1: Strategic missions and orientations in the mail activity
Article 2: Outline of the mail pricing policy
Article 3: Strategic missions and orientations in financial services
Article 4: Contribution to regional planning and development
Section II: Conditions for success
2.1. Quality
Article 5: Quality of Service
2.2. Financial and development objectives
Article 6: Financial and development objectives
2.3. Management framework
Article 7: Obligatory press transport and distribution service
Article 8: Money order service
Article 10: Research and investment policy
2.4. Human resources policy
Article 11: Human resources policy
2.5. Revision procedure
Article 12: Revision procedure
ANNEX I: Conditions for granting credit facilities
ANNEX II: Management indicators used in the performance report on the contractual plan
PREAMBLE
The contractual plan between the Post Office and the French Government sets out the management framework within which the Post Office shall implement the main strategies of its group for the 1995 - 1997 period.
Thus defined, the management framework enables the attainment of the development objectives assigned to each component of the portfolio of activities of the Post Office. It allows for the progressive achievement of improved quality throughout the company, enhanced overall competitiveness and the recovery of financial equilibrium. In this clear context, the company shall be able to fulfill its public service missions, upon which its social responsibility is founded, particularly by contributing to regional planning and development.
The two mail activities (processing of mail and information for private or business use, and parcel post) and financial services make up the portfolio of activities of the Post Office. The Post Office is made up of a coherent and solidary group, led by competent men and women, and using modern, diversified equipment and shared electronic networks. The Post Office intends to base its development on a permanent effort to modernise and adapt the range and content of its services. The subsidiaries of the Post Office group shall contribute to attaining this objective, both in France and abroad.
To improve customer satisfaction, the Post Office needs to enhance the quality of its services, as quickly and as completely as possible.
Beyond developing the range and quality of its services, the Post Office also aims to build its competitiveness on a structurally sound financial situation, which would not place an unfair financial burden on its production costs compared with those of its competitors. It aims to attain a long term postive net result, which will enable it to improve its balance sheet structure and remunerate its owner, the Government.
Development, quality and competitiveness are indissociable from the Post Office's social commitments and responsibilities. The Post Office's commitment to society is generated by its public service mission (universal mail service, contribution to the transport of free, diversified information, contribution to regional planning and development, etc.), and in the participation of its employees in the development and overall competitiveness of the company.
This contractual plan sets out the agreement between the Government and the Post Office on a global project of competitive development for the operator and its group. This project confirms the comprehensiveness and complementarity of the company's portfolio of activities. The Government supports and backs the efforts made by the Post Office in ensuring its future as a company whilst carrying out and confirming its specific missions. During the period covered by the plan, the Post Office shall pursue the effort undertaken to effectively keep pace with the future legal developments in the Community environment.
Section I: STRATEGIC MISSIONS AND ORIENTATIONS
Article 1: Strategic missions and orientations in the mail activity
The Post Office has the task of providing a universal mail service, on the French territory and its dependencies, in compliance with the guidelines of the Council of the European Union, the articles of the Universal Postal Union and its Schedule of Conditions.
As operator of the universal service, the Post Office is also entitled, within the limits of the rules of competition and in accordance with the guidelines of its Board of Directors, to offer a varied range of services to private citizens and businesses in markets not subject to universal service obligations, within the framework provided by its Schedule of Conditions.
The Post Office shall ensure the economic equilibrium and profitability of its services open to competition, and the absence of cross-subsidisation from the reserved sector, which would distort competition. The conditions governing the provision of press transport and distribution services are set out in Article 7.
During the period provided for by the contractual plan, the Post Office shall implement the following major strategic goals:
- to consolidate written material as a means of communication and to become the main provider of this service through a competitive service offer for services both upstream and downstream in the traditional postal chain of added value;
- to modernise its service offer by incorporating electronic transmission services;
- to improve its position in the market for the transportation of merchandise;
- to promote distribution know-how and employ it fully to provide a varied range of services.
With this goal in mind, the Post Office may offer press publishers a competitive morning carrier service. This would be a value-added service separate from the basic service and sold at a normal business price, as in other European countries.
-to prepare itself competitively to the gradual, controlled opening up of the postal sector to competition. This would mean focussing on sustained development and productivity, and would also concern revision of its pricing policy;
- to add customer satisfaction to the performance and quality of service indicators, and through a structured quality effort make customer satisfaction the quality standard for mail services.
In order to ensure the Community objective of economic and financial viability of the universal mail service, the Government:
- shall act within the bodies of the European Union, for the recognition of a concept of reserved, universal and obligatory services compatible with the economic equilibrium of the Post Office,
- shall ensure the defence of the Post Office's exclusive rights, in the reserved sector.
The Post Office shall continue to promote and develop a policy of active cooperation with the other postal services of the European Community, which is particularly necessary at a time when the borders between the Member States and the rest of the world are being erased, in order to meet customers' needs for international exchanges.
This cooperation may take the form of shareholdings or joint ventures with public or private partners, with the aim of allowing the Post Office to pursue its activities internationally in sound economic conditions.
The Post Office shall define its group strategy with regard to this prospect.
The Post Office, with the other European operators, shall ensure the implementation of a policy for improving the quality and compatibility of services rendered.
Article 2: Outline of the mail pricing policy
Price is a decisive element which affects demand and plays a key role in product development.
In order to make a lasting contribution to the financial equilibrium of the mail activity, the pricing policy must take into account fully allocated costs, the price elasticity of demand, and the need to be competitive.
Confronted with direct competition or competition stemming from new communication media, the Post Office aims to control its service prices. Given the forecast evolution of its production costs, the expected increase in productivity, and the anticipated change in traffic volume, as from 1995 the overall tariffs for reserved services shall be fixed at an average level equal to that of the consumer price index.
Whilst respecting the geographically uniform tariff of the reserved service, which guarantees universal access to the postal network, the Post Office must seek a more efficient tariff structure for its products. It is particularly important that the tariff structure chosen should limit the risks of cream skimming, which could endanger the viability of the universal service.
With this aim in mind, the Post Office shall develop tariff schemes which are best adapted to the economy of its markets, in compliance with the general rules of competition and its public service mandates.
Article 3: Financial services missions and orientations
The Post Office shall aim to develop its financial services towards an open market, in keeping with their competitive nature, while taking into account on the one hand the economic equilibrium of this activity, and on the other hand the limitations involved in financing the economy.
The period covered by the contractual plan must enable the Post Office to:
- consolidate its overall market share by maintaining its business dynamism, through a reinforcement of its sales force and better retention of customer loyalty, and by expanding its range of services.
Within the framework of this positive business policy, the Post Office shall develop all services required in order to provide its customers high quality services in means of payment, cash facilities, including temporary overdrafts (according to conditions set out in Annex 1 of this contract), savings, investment and insurance products.
In conformance with its mission, the Post Office shall participate actively in promoting the "Livret A" (cheque account).
- develop its operating products by controlling the gross margins on its various services. With this goal in mind, the Post Office shall seek to promote high perfoming products, in compliance with its Schedule of Conditions and after consultation with the partners concerned, particularly with consumer associations. With the aim of achieving a concerted maximisation of its revenues, the Post Office shall strive to negotiate its financial margins to its advantage.
- balance the management of the postal financial services activity. A wide reaching consultation excercise shall be carried out on improving organisational competitiveness, which is essential to the achievement of this objective. As a part of this process, the Post Office shall undertake to pursue the modernisation of the financial services management system, through an appropriate framework, and to introduce specific management standards, particularly in order to guarantee the equilibrium of this competitive service.
In order to consolidate the profitability of its financial service activity, the Post Office may adapt its offer or propose alternative services where the existing ones generate a disequilbrium, in compliance with the law and the Schedule of Conditions.
Article 4: Contribution to regional planning and development
The Post Office, in compliance with the law of 2 July 1990 and its Schedule of Conditions, shall contribute to regional planning and development. The Post Office shall provide the entire territory of France and its overseas departments with a high quality public service to meet the needs of all categories of users, both households and companies, especially in rural areas and in suburbs.
The service offer:
Through its network and infrastructures, the Post Office shall ensure that it is able to provide its various customers with appropriate ranges of communication, parcel post and financial services throughout the territory.
Beyond these services, the Post Office shall also participate in national solidarity by taking into account the specific requirements of the most disadvantaged areas, whether rural or suburban, and in contributing to local development.
- The Post Office's contribution to the expression of national solidarity may take the form of participation in schemes, set up on the initiative of the Government or of decentralised communities, to ensure a satisfactory level of public services in disadvanted areas. This participation, decided on a case by case basis, should not upset the financial equilibrium of the operator, and should allow it to enjoy the same conditions and facilities as the other service providers.
- The Post Office shall develop and adapt its services by focussing, on the one hand, on its infrastructure networks, thus helping to boost the local economy, and, on the other hand, on the ability of its personnel to give a wide range assistance to the most isolated citizens in the areas concerned.
Conditions for implementation:
In order to fulfill its mission, the Post Office shall apply the principle of a geographically uniform tariff for reserved services, ensuring equal access for all users, throughout the French territory. The Post Office shall be present in a number of forms, in accordance with the local situations, allowing it to adapt to developments over time, in order to ensure the flexibility which is essential in its network.
To achieve this, it shall be the responsibility of the Post Office, within the framework of regional planning and development procedures (especially schemes of organisation of the "départements" and improvement of services in rural areas), to determine the conditions governing the different types of presence: buildings, mobile, permanent, periodic, home visits, managed alone or with partners, with supply of other services or not. It shall do so while ensuring, as far upstream as possible, that changing local situations are adapted to as required, through close, regular consultation with the elected officials and representatives of the users, whilst keeping the local authorities informed of its intentions.
In order to maximise the efficiency of its network, the presence of the Post Office shall be analysed at the most pertinent level with the communities concerned. The service offer may be made within a framework adapted to local particularities:
- in association with the local communities, state owned companies and Government administrations (multiservice points, public points);
- search for partners with other public or parapublic services, as well as with the local economic agents, in particular with businessmen in rural areas, who may offer postal services on behalf of the Post Office.
Such operations shall be preceded by the necessary trials and consultation. They shall be performed within the framework of a standard contract, which shall specify the commitments of each party, as well as the guarantees offered as to the quality of service rendered to the users.
Section 2 : THE CONDITIONS FOR SUCCESS
2.1 Quality
Article 5: Quality of Service
The Post Office places the satisfaction of its various groups of customers at the top of its list of performance criteria, stressing regularity, speed and customer reception.
The Post Office shall continue to have the quality performance of the mail service measured by an external entity. Using this external measurement system, the objective to be reached by the end of the contractual plan, is to increase the percentage of domestic mail delivered in France on the next day to 80%, and on the second day to 96% (respectively 77.9% and 93.9% in 1993).
In addition, over the duration of the contractual plan, the Post Office shall generalise the external measurement of satisfaction of its various customers.
The Post Office shall make the regularity of quality of service a priority. It shall set up systems to improve the handling of complaints and shall pursue, for its contractual services, a business approach inducing responsibility.
The indicators specified in Appendix 2 shall be monitored throughout the duration of the contractual plan.
2.2. Financial and development objectives
Article 6: Financial and development objectives
The period covered by the contractual plan must enable the Post Office to reestablish balanced accounts, particularly in its current results, and to approach equilibrium in each of its activities.
Over this period, the Post Office, in agreement with its supervisory authorities, shall complete its cost accounting with an in depth accounting identification, with the technical support of its auditors, of each of its main areas of activity. It shall present to the Government, in particular, an income statement for mail and for the financial services, incorporating improvements in the cost accounting system.
In this framework, it shall ensure the development and improvement of its public service activities, while controlling costs.
The overall development of its activities, which entails an increased business effort, must also be based upon a productivity effort, a complementary condition for ensuring the competitiveness of the company and the long term future of its activities.
The Post Office shall also implement an active debt control policy.
These objectives must be attained, at the latest, in the last year of the contractual plan.
The Government may participate in these efforts, directly or indirectly, by taking into account the need to reinforce the equity of the Post Office.
The Post Office shall communicate, in the annual contractual plan performance report, the figures regarding the management indicators listed in Appendix 2.
2.3. Management Framework
Article 7: Obligatory Press Transport and Distribution Service
Transport and distribution of the press, which is essential for the circulation of free and varied information, enabling every person to have access to the publication of his choice, constitutes a public service in application of Article 2 of the law of 2 July 1990. The Post Office shall provide this service in conformity with the provisions of Articles 2, 3 and 6 of its Schedule of Conditions.
As an obligatory service, the press transport and distribution service is governed by a specific regime of the Posts and Telecommunications Code. This service is defined notably as the distribution throughout the territory, on the next day or fourth day according to the frequency or requirements specified by the publishers, and subject to the respect of posting times and collection points as agreed with the Post Office. Distribution means the delivery to the final addressee during the first delivery round of the universal service.
The Post Office has already reduced the delivery times of this service in relation to the collection point and time of posting, the area concerned and the means of transport available; this is the case notably for daily papers which are distributed on the same day in the "departments" (administrative zones) in which they are posted. These particular provisions governing the operating of the service of reference, which aim at improving the satisfaction of the final receiver shall continue to be applied, as they are today, by agreement between the Post Office and the publishers.
The modalities governing the pricing and financing of this service are a considerable financial burden on the Post Office and the Government. Consequently it is necessary to improve the transparency and clarity of the pricing system for both the Press and the Post Office, in conformance with the provisions of Article 38 of the Schedule of Conditions and Article 6 of this contract. These conditions shall be necessary in order to develop a satisfactory
customer-supplier relationship.
Press/Post Office relations should develop towards a system in which prices are negotiated and supported within a framework associating the Government, the Press, and the Post Office. Integral components of this system shall be the general principles of business management and equilibrium imposed on the Post Office, and also the specific quality requirements governing press distribution. This system shall be decided on by negotiations between the concerned parties which should be completed by 31 December 1995 at the latest, and which shall be carried out within the framework of a global reflection on state aid to the press.
These negotiations will enable agreement to be reached on any changes made to the publishers' financial contribution over the 1996 - 2005 period. Quality of service objectives to be met by the Post Office shall also be specified, as well as the means of financing and the system used for monitoring service quality.
During the period of the contractual plan:
- the Government shall establish its annual contribution in terms of aid to the press, by calculating on the basis of FFr1.9 billion for the whole period,
- the Post Office shall ensure 1.5% productivity per year in this activity, within the framework of its global productivity plan. The profits gained shall be used to reduce the deficit from the press transport and distribution activity, which remains the responsibility of the operator.
Article 8: Money order service
Throughout the duration of the contractual plan, the Post Office shall improve its money order service, with the objective of attaining the financial equilibrium of this service.
With this goal in mind, the Post Office:
- shall redefine the range of "domestic" money orders which it offers, in order to improve the quality of the services offered for which it seeks to reach operating equilibrium.
- shall redefine its range of "international" money orders, particularly by developing the role it plays in the international money transfer networks to which it has access.
The contractual plan enables the Post Office to place the management of its financial services within a stable, motivating framework.
During the duration of the contractual plan, the interest borne by the postal cheque account funds deposited with the Treasury is fixed by reference to market interest rates. The Post Office charges interest equal to the interest rate on fixed rate, prepaid interest French Treasury Bonds (13 week), less 0.4% commission as compensation for the guarantee offered by the Government on the current account postal deposits. The application of this formula ay not lead to interest less than 4.75% or more than 6.5%.
These contractual principles allow the Post Office to enjoy a stable interest payment system, compatible with its collection needs. The precise calculation and conditions governing interest payments are set out in the convention relating to the management of cheque account funds.
For each of the three years of the contractual plan, the interest payments made to the Post Office by the Caisse des Dépôts et Consignations for the Livret A and B cheque accounts are equal to 1.5% of the average rate.
Article 10: Research and Investment Policy
Research and Investment Policy
The investment policy of the Post Office shall have two objectives:
- to continue modernisation of the company, and to encourage its development.
These objectives shall be fulfilled by the implementation of the following programme:
-consolidating paper as a means of communication, by meeting the needs of press publishers, by supporting growth in advertising mail and by participating actively in the development of numerous new forms of mail,
- improving the mail service for various categories of customer, notably by developing the services offered to businesses, including those using electronic communication,
- modernising postal equipment,
- strengthening non-substitutable markets, by updating the range of fourth class mail and by putting in place a dedicated business network,
- improving individual customer service in the field of financial services, by diversifying distribution channels, and by offering new services,
- modernising the financial services production equipment,
- updating and maintaining all existing infrastructure (office networks and buildings, vehicle fleets, IT equipment).
Within the limits of the global financial objectives provided for in the current contractual plan, the Post Office may invest up to FFr9 billion in these different programmes. The figures shall be examined annually by the Board of Directors of the FDES (Fonds de Développement Economique et Social).
Research and development by the Post Office shall be carried out in three fields:
- manufacturing techniques and procedures; modernising and increasing the range of products and services offered, social and human science.
The Post Office shall concentrate its research and development on the fields which are specific to its activity. It shall continue with the studies undertaken on automatic reading and smart card applications.
The Post Office shall engage itself in all forms of cooperation in which may share or valuably employ its effeorts to encorage standardisation, particularly at a European level.
2.4 Human Resources Policy
Article 11 : Human Resources Policy
Within a framework aimed at development and competitiveness, the human resources policy of the Post Office shall have three main components:
- to develop job skills
- to control personnel costs
- to implement an exemplary employment policy
. the development of job skills
In accordance with the conditions negotiated, the Post Office shall continue in its effort to adapt jobs through the system of classification and shall implement a determined policy on professional development and training.
. controlling personnel costs
The Post Office shall aim to ensure that increases in turnover shall exceed any increase in the payroll.
The business dynamism of the company shall facilitate the attainment of this objective.
This objective shall be fulfilled on the one hand by controlling the overall increase in salaries and on the other hand by implementing a responsible employment policy based on optimising the organisation.
an exemplary employment policy: flexibility, reorganisation of working hours, solidarity
Flexibility : The Post Office shall seek to improve job flexibility by taking into account both the needs of the company and the aspirations of the workforce. Hand in hand with the trade unions, the Post Office shall apply the personnel management policy to facilitate the re- placement of personnel and encourage mobility.
Reorganisation of Working Hours : The Post Office shall adapt its organisations and encourage in particular the development of part time employment, thus enabling new forms of employment which respond better to both customer and employee requirements to be established.
Solidarity : The Post Office shall be committed, as a public company, to the national employment policy, and shall implement an exemplary policy to encourage youth employment (notably through training) and the reinsertion of people in difficulty.
In order to fulfill these three objectives, the Post Office shall implement an appropriate recruitment policy. State employees can be re placed, outside the working position in their organisation in up to 200 posts.
Article 12: The revision procedure
This contractual plan is signed for three years on economic bases corresponding to the current legal and tax institutional environment and to a macro economic environment as is forseeable at the date of its signature. On these bases, the forecast level of growth in terms of volume of turnover of the mail activity corresponds to that of GDP by volume, less 0.5 point.
If one or several components of this general environment should be significantly modified during this period, one or several additional clauses to the contract shall be set forth to modify, to the extent necessary, the terms and conditions governing the performance of this plan.
The revision procedure may be applied at any moment, at the request of either of the two parties, independently of the procedure for the examination of the annual performance reports.
Finally, this contractual plan shall be added to when necessary, in the area of the Post Office's contribution to regional planning and development, in order to take into account the provisions of the guiding law on the development of the territory, as passed by Parliament.
APPENDIX 1: The conditions for granting cash facilities
Each holder of a postal cheque account has a right to a temporary overdraft, under the conditions specified below.
The maximum authorised overdraft amount is calculated as follows:
For each account holder, a "base overdraft" is determined, equal to 30% of a fixed base The base is equal to the average, over the past 6 months, of the cumulative amount of credit movements.
The overdraft amount actually authorised by the Post Office for each account is modified from 0 to 70% of the base according to the quality and financial behaviour of the account holder, measured using the following six categories of criteria:
- sum of monthly credit movements on the account,
- capacity as account holder, domiciliation, length of time cheque account has been held,
- financial surface of liquid savings (A, B, LEP, CODEVI accounts),
- holding of a bank card, length of time held,
- identification of stock market or contractual savings products,
- functioning of the postal cheque account.
The overdraft amount authorised remains valid for one year, barring a large variation in deposit levels.
For each postal cheque account, the cumulative number of overdraft days authorised may not exceed forty-five days per quarter.
The preceding system shall be implemented before 30 June 1995.
Service quality objectives
- Quality of mail service on next day and second day, measured by an external entity: for domestic mail in France
delivery on next day:..................................................80% in 1997
delivery on second day:.............................................96% in 1997
- Company mail on next day:.................................................83% in 1997
- Measurement of abnormal delays
all mail beyond second day:...................................... 3% in 1997
- Quality of intracity mail service on next day:........................90% in 1997
- Quality of service of addressed advertising
POSTIMPACT on seventh day:................................97% in 1997
- Average intermediary routing time for international mail on next day
average concentration time to exchange office.........94% in 1997
- Satisfaction rate for reception in post offices......................83% in 1997
Management indicators
- Pyroll / Added Value.
- Debt / Cash flow.
- Debt / Equity.
- Gross operating surplus / Turnover.
- Financial expenses / Turnover.
- Dividends / Net result.
- Financial expenses / Debt.
Financial services indicators
-Net income from financing operations / agent
The factors which make up these indicators shall be given a precise definition before this contract goes into effect.
The final accounts for 1994, drawn up in accordance with tax laws equivalent to those for 1995, shall serve as a basis for analysing the development of the indicators over the duration of the contractual plan.
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