Internal affairs and communications minister Kunio Hatoyama is holding back Japan Post Holding Co.'s plan to sell 70 Kampo no Yado inns and nine housing facilities to a subsidiary of leasing company Orix Corp. He thinks the facilities' sale price of ¥10.9 billion — about one-twentieth the cost of the original investment — is too low and that the circumstances surrounding the bidding process are not transparent. He also wonders why all facilities must be sold together.
Japan Post insists that there were no irregularities concerning the bidding process. It points out that the December 2008 contract obligates the Orix subsidiary to continue to hire some 3,200 employees of the facilities. It is reported that workers will be ensured employment for one year. As Japan Post has decided to set up a committee of specialists to examine matters related to the sale of the facilities, it needs to disclose detailed information if it hopes to gain people's understanding.
About ¥240 billion was spent to buy the land and build the facilities. Although the facilities are operating at about 70 percent, their profitability is not high because of the initial investment and personnel costs. According to Japan Post, the Kampo no Yado inn business runs an annual deficit of about ¥4 billion, which includes losses of some ¥2.4 billion at the management and support sections.