Mail, postal savings services outsidemajor cities in red ink

The mail and postal savings services at almost all of the 12 regional postal bureaus, except for those in the Tokyo, Osaka and Nagoya areas, were in the red ink for three years from fiscal 1997, according to a government report released Monday.
The postal insurance service, known as ”Kampo,” was in the black ink for the three years at all regional bureaus, according to the report compiled by the Ministry of Public Management, Home Affairs, Posts and Telecommunications.
In fiscal 1998 and 1999 when the mail service posted a deficit of more than 50 billion yen each year, the Tokyo Regional Bureau was the only regional postal services bureau to stay afloat in the mail service with profits of some 130 billion yen for each year.
All the other 11 bureaus had losses from the mail service.
The Kanto, Tokyo, Tokai and Kinki regional bureaus were the only bureaus to be in the black in the mail service even in fiscal 1997, when the overall mail service posted a profit of some 20 billion yen.
As for savings operations, all postal bureaus were in the red in fiscal 1998 and 1999, except for the Okinawa Regional Bureau in fiscal 1998.
The ministry blamed the results for the two fiscal years on the maturity of high-interest savings accounts.
”If privatization creates competition (with private mail and parcel businesses), it could wipe out many rural post offices,” a ministry official said.
”It would become difficult to maintain the current regime where mails and postcards can be delivered at uniform rates throughout the country,” the official said.
According to the ministry, there are 540 small towns and villages where there are no other financial institutions.
In briefing members of a panel charged with advising Prime Minister Junichiro Koizumi on postal services reforms, the ministry disclosed that the domestic mail delivery service alone had a loss of 50 billion yen in fiscal 1999, ministry officials said.
A 47 billion yen portion of the loss in the mail service originated in areas of business where the service confronted competition with private businesses such as parcel-delivery and trucking firms, they said.
The financial results of the mail service were made public for the first time at the request of the advisory panel.
”This is important data that will be examined when we consider (whether to keep) the current regime under which mail charges have been kept identical throughout the nation,” said commentator Naoki Tanaka, who chairs the panel.
Tanaka said he will consider whether the postal savings system, if privatized, should be put under the supervisory jurisdiction of the Financial Services Agency.
Whether postal savings should be covered by the state-run deposit insurance system will also be discussed, Tanaka said.
The government is slated to put the postal services under a public corporation in 2003.
Koizumi said Monday he will seek to open the state-run postal services for entry by private companies as much as possible.
For opening of postal services, ”everything private companies can do should be left to them,” Koizumi told reporters.
KYODO NEWS INTERNATIONAL, 09th July 2001