The government will select private-sector personnel for the presidential posts at five spinoff units of Japan Post to be created in April 2007, sources said Friday.

The government believes employees taken from the private sector will ensure success in the 10-year process, the sources said. The privatization of the nation’s postal system is to begin in 2007.

The candidate-selection process will begin by the end of this year at the earliest and will be carried out under the instruction of Prime Minister Junichiro Koizumi, the sources said.

The government plans to privatize Japan Post in April 2007 by splitting the public corporation into four firms — one each for mail delivery, postal savings, life insurance and managing the nationwide network of post offices — under a government-affiliated holding company.

The government wants Japan Post to establish a wholly owned preparatory entity around next January. The entity is expected to transform itself to the holding company later, according to the sources.

At the preparatory entity, Japan Post is expected to set up a management committee of up to seven members who would map out details of the privatization, the sources said.

The first presidents of the four firms and the holding company are expected to be selected from the committee members, according to the sources.

The government is expected to include the establishment of the preparatory entity in postal privatization bills now being prepared.

Postal privatization minister Heizo Takenaka separately revealed the plan of establishing the preparatory entity and the management committee at a news conference Friday.

He intends to have some of the committee members participate in the management of the holding company.

The committee will spend until the end of March 2007 working on the issues of how to separate Japan Post’s assets from its debts and how to distribute its personnel into the four units. The public corporation’s employees are expected to total about 252,000 at the end of March 2007.

The committee will also report to the government by September 2006 on whether the entire privatization process can be launched in April 2007 as planned.

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