A step too far for the west's privatisers

If Japan’s Prime Minister succeeds in privatising the postal service, he will guarantee himself a place in the financial history books.

Most countries, even those which have embraced the liberalisation of their postal services, have stopped short of a stock market flotation.

The reasons are varied: for some governments, the prospect of a privatised postie is politically contentious; other administrations, mindful that the income stream from a well-run delivery network can be very lucrative, prefer to keep hold of the purse strings; and still others believe that postal markets will fetch a higher price once vigorous competition is allowed to flourish.

Some governments, however, have successfully managed a partial sale of their postal networks. In the Netherlands, for example, the Government has sold 65% of TPG to institutional and private investors, retaining a 35% stake.

The German authorities hold 68% of Deutsche Post, after bringing the company to the stock market three years ago. The Government retains a direct holding of 50% and an additonal 18% stake which is held by a state-owned bank.

The Danish and Austrian Governments are also poised to sell post office shares to investors.

However, deregulation and privatisation do not necessarily go hand in hand. The postal markets of Sweden, Finland and New Zealand, for example, are among the most liberalised in the world, but remain steadfastly in the hands of the government.

In most cases, external businesses have struggled to prove competitive, largely because the incumbents have built an infrastructure that newcomers are unable to match. Finland imposes an additional obstacle on new players by asking them to make a substantial contribution to the cost of providing a one-price-to-any-destination strategy.

In the UK, the privatisation of Royal Mail has never really been a serious political aspiration. Even the Conservatives, who sold off most of the national silver, pulled back from attempting to sell the postal service. Labour, before it was elected, toyed with the idea of selling half of the organisation but quickly retreated under pressure from backbenchers and unions.

Allan Leighton, the chairman of Royal Mail, has ruled out privatisation under his watch, which has at least another 18 months to go.