Eircode Anniversary Fact Checks

Posted by Pat Donnelly | Jul 07, 2016

The first anniversary of the launch of Eircode is Wednesday 13th July 2016.  This blog fact checks some Eircode claims we've seen in recent articles.

Eircode has cost the taxpayer €38 million
The table below details the spend to the end of June and the total ten year cost.  
Contractual Costs Paid to end June 2016 Cost to Exchequer to Jan 2024 
Eircode Project
NPS Design €3.2m €3.2m
NPS Launch and dissemination €3.77m €3.77m
PSB Database encoding €11.5m €11.5m
Ongoing maintenance and Service costs €0m €14.75m
Subtotal €18.47m €33.2m
Other Costs
Specialist and Staffing Costs €2.735m €4.8m
Total Cost €21.205m €38m

You can see that the total projected cost for Eircode by 2024 is €38 million, and that €21.2 million is the spend to date (figures inclusive of VAT).  The top three categories give a breakdown of the cost of the Eircode Project.  The bulk of the money was spent on appending Eircodes to over 90 million addresses across various Government departments.  This was a separate project to the design and launch of Eircode.  It was included in the Eircode project as a substantially lower cost alternative to multiple separate Departmental procurement processes and IT projects occurring after Eircode launch. It also allowed Government departments to gain immediate benefit from Eircodes at launch.

So the actual cost of the Eircode project, the part that everyone thinks of when they read "we spent €38 million on Eircode" is the design, build, and launch.  The launch and dissemination cost €3.77 million, and the total cost to design and  build Eircode was €3.2 million.

The bulk of the ongoing maintenance and service costs up to 2024 are licensing costs that are owed to An Post for their GeoDirectory address database.  This accounts for €11.67 million of the €14.75 million. The remainder, the total service charge the state pays per annum to the contractor to ​run Eircode, is €307,500.  
Eircode budget has overrun by €20 million
The natural reaction to a headline of "budget overrun of €20 million" is to assume that the contractor has billed the Government €20 million more that was originally estimated.  This isn't the case.  The C&AG report on Eircode states that the cost of the contract awarded increased by €686,000 due to three agreed change requests.  The bulk of this increase was €492,000 for an outreach campaign conducted by the charity organisation The Wheel.

How do we explain this discrepancy between €686,000 and €20 million?  The confusion is caused by comparing the figure quoted for the build phase, €18 million, with the final ten year estimate of €38 million in the C&AG report.
C&AG stated it was unlikely that Eircode benefits would be achieved
Actually the C&AG report states "It is not clear that benefits to the value projected will be achieved as a result of the implementation of Eircode."  Somehow "not clear" has morphed into "unlikely".   The C&AG report ​highlighted the National Postcode Project Board cost benefit analysis performed in 2009 ​only included a build phase cost estimate of €18 million, and didn't take into account the cost of the Department’s staffing resources or the cost of consultants or the ongoing annual payments to the license holder.  It was also based on an area based postcode design rather than the unique postcode design adopted.

The C&AG report argued that the benefits are unclear ​as an updated cost benefit analysis was not undertaken to assess the impact of the design change and to include all costs attributed to the project.

4. Businesses aren't using Eircode We've dealt with that in our last blog What has Eircode ever done for us? As of June 2016, 399 organisations have licensed and are using Eircode data.
Couriers and delivery companies cannot use Eircode
There are two separate claims;  Couriers can't use Eircode to find delivery addresses and they can't use Eircode to sort deliveries.

1. Couriers can't use Eircodes to find deliveries

When Eircode was launched the only way for a delivery driver to find an Eircode was to use Eircode Finder.  This is limited to 15 lookups per day, and is intended for non-commercial use.

In May 2016 Autoaddress released a free Eircode app that allows delivery drivers to look-up Eircodes without limit, view on the integrated Google Maps and get Sat-Nav directions.

Google are working on integrating Eircode into Google Maps directly, we expect this will be released shortly.  TomTom have also licensed Eircode data and are integrating it with their Sat-Nav products, other Sat-Nav providers are expected to follow when Eircode reach agreement with Here (formerly Navteq).

2. Eircode can't be used to sort deliveries

The Eircode database includes small area identifiers.  These 18,000+ areas nest inside existing Electoral District and County boundaries and usually contain 80 to 120 households.  The small area data is available for download from data.gov.ie, Irelands Open Data portal.

Small Areas are excellent building blocks to define delivery areas and help group and plan deliveries.  It is a simple IT process to look-up a Small Area from an Eircode.  We have also described how to implement a simple human-readable labelling of Small Areas to facilitate manual sortation. ​If the process is simple, why are some courier companies, and their representatives in the FTAI, claiming Eircode can't be used?  There is a difference between simple and easy.  Your systems must be capable of making a single web-service look-up call, or capable of storing locally the small amount of Eircode data required to perform the lookup.  If your systems aren't capable of either, or it isn't a trivial task to upgrade, then the task can be difficult.  Delivery companies in this predicament can correctly claim that they cannot use Eircode to sort deliveries, but only to the extent that they are describing their current IT limitations. They can use Eircode if they upgrade their IT systems.

Delivery companies like Nightline and Fastway are integrating Eircode into their systems in this manner. 

An Post doesn't use Eircode
This claim is mainly based on an expectation that An Post staff would use Eircode to deliver post.  Postcodes are used to sort post.  An Post sort post automatically at their four main sorting centres.  Post is sorted manually in their other centres.  An Post sort post using Eircode in their automated sorting machines.   An Post will use Eircodes in manual sorting and automated sequence sorting of Postpersons routes when the volume of mail containing correct Eircodes reaches a critical mass.

The more people use Eircode on post, the more An Post will use Eircode.
Eircode isn't generally included in addresses.
To test this claim enter a partial address with a new Routing Key and see how many hits you get in google.  For example A96 is the Routing key for Dun Laoghaire, and if you google "Dublin A96" you get 7,200 results.

Fact checking is boring, thank you for taking the time to read the entire article.  Eircode project cost figures in this article have been sourced from http://www.oireachtas.ie/ and C&AG report

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