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.
Under the relevant law, Japan Post is required to sell or abolish the facilities by September 2012. But it may have decided to sell them too hastily because of the financial burden they impose. It should have examined the business conditions and the reasons for deficits at each facility and worked out measures likely to produce profits. It also has been disclosed that 11 facilities are in the black, one at the break-even point and 11 with an annual deficit of less than ¥10 million.
Kampo no Yado inns were built with the premiums paid by Kampo postal life insurance policyholders before the October 2007 privatization of the postal system. In this sense, they are public property. An easy-to-understand report on the sale by Japan Post is imperative.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
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