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The management of the land transportation business such as National Railways
and other railway and bus companies in fiscal 1974 has the balance of ordinary
profit and loss worsened further because of the considerable increase of the
labor, fuel and other expenses although the fares were revised in 1974 but were
scarcely able to cover the increase of expense. Thus, the ordinary balance rates
of these trades are falling below 100 percent as shown in Fig.
2-3-1.
The railway, bus and other land transportation businesses are highly dependent
on labor, and the contribution of labor cost to the increase of ordinary expense
during fiscal 1972 to fiscal 1974 is more than 60 percent as shown in Fig.
2-3-2, thus indicating that the rise of labor expense was the largest factor
for increase of the cost.
Further, in the railways, improvement of the facilities of very high cost
such as elevated or underground tracks is increasing and so the investments
not directly related to improvement of the profit such as for allevation of
the congestion, improvement of the service, safety and hazard preventive measures,
etc. These with the general trend of increase of the land and construction costs
constitute a great burden for management of the enterprise.
In the aspect of demand, the land transportation received the direct effects
of overpopulation, depopulation and motorization as described in the foregoing.
In the local area, the volume of transport by railways and buses is decreasing.
In the urban area, the buses and taxis are having a decreasing trend due partly
to the road congestion and partly to the improvement of railway network. In
fiscal 1974, the railway and road cargo transports had the volume of transport
decreased greatly due to stagnation of the shipment and were unable to yield
a sufficient income.
The land transportation is a trade of a high percentage of labor cost generally
and, compared with the other divisions, it is difficult to improve the productivity
(Fig. 2-3-3).
The rise of wage is hardly absorbable by the improvement of productivity.
Thus, the level of fares falling far below the rate of elevation of the consumer
price index as seen in the case of fares of National Railways is taken as a
great factor inducing a management crisis (Fig.
2-3-4).
The policy to constrain the traffic and other public fares and fees may
be more or less effective as an emergency measure for stabilization of the commodity
prices, but such stabilization is to impose a great sacrifice upon the public
transport means such as railway and bus. In the case of the National Railways
or other public corporation, the revision of fares is often delayed or amended
from the requirements such as Suppressing the commodity prices so that the fares
are apt to be of low level, thus making it difficult to appropriately formulate
the fare system of the whole transport trade. As the result, the railway, bus
and other public transport organizations have the payability deteriorated, leading
to suspension of the investment and degradation of the level of service. It
is thus anticipated that their functions may not fully be exhibited notwithstanding
the high evaluation of their efficiency, low hazardness and safety.
The fares should, therefore, be of the level such that they include the
costs for safety and pollution preventive measures the weight of which is expected
to increase hereafter and are enough to recover the cost required for offer
of the transport service and also facilitate the raising of fund required for
expansion and improvement of the facilities. Further, from the point of view
of adjusting the burden of fares including consideration of the reasonability
of discounting the fares for the commutators, it is desirable that the revision
of fares will be carried out at appropriate times in an appropriate manner.
However, for such an requirement that is hardly manageable actually by the
fare income alone, it will be necessary for the government or local public organization
to share a part of the expense with the scope clearly set forth.
From such a point of view, subsidies are granted to (1) a construction work
the expense of which is excessive for a single enterprise to bear such as large
city railway, (2) a railway or bus line required for a new town but the payability
of which is hardly securable at first, and (3) a local bus or smaller commercial
railway line the management of which is difficult because of the decreasing
demand.
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