Japan Post will inform the government today that it will be difficult to split the postal corporation into four entities by April 2007, citing the need for more time to install new computer systems, sources said.

In September, the Cabinet agreed on a basic policy for postal privatization that would divide Japan Post into a holding company and four operating companies by April 2007.

One provision of the plan, however, allows for information systems experts to determine by the end of this year whether system development could be completed within that time frame.

The experts committee that will review a Japan Post report to be submitted today is scheduled to decide on the issue before the end of this year. Opposition to Japan Post's position is expected.

One focus of the committee's discussions will be whether the four operating companies need all the system functions that Japan Post considers necessary.

Japan Post will tell today's meeting that it will take at least three years from the time orders are placed to put the core computer systems for the new companies into operation.

There are three big difficulties in bringing all the systems online by April 2007, said Japan Post sources.

One is the amount of reprogramming required for the current system, which links local post offices and head and branch offices. Changes will be needed in 35 million places to enable separation of personnel and accounting systems for each company, sources said.

The scale of reprogramming is greater than that required when NTT was broken up and restructured.

A second issue is that completely new systems will be needed for inventory control and other procedures for one operating company that is to provide new over-the-counter services.

A third problem is bidding requirements. Since the World Trade Organization agreement on government procurement will apply to the system's development, it may take as much as a year just to select which firms will handle the job.(IHT/Asahi: October 25,2004) (10/25)