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The financial condition of the Japanese National Railways has been in a downward spiral since it moved into the red in fiscal 1964, and various reconstruction measures have been promoted by the Japanese Government since then. In December, 1975, the "Japanese National Railways Reconstruction Plan" was formalized by Cabinet approval. Based on this plan, the liabilities were shelved and fares were raised by 50% (nominal) starting in November, 1976. The deficit JNR suffered in fiscal 1976 was \914.1 billion. Thus, accumulated deficits and the balance of long-term liabilities reached \974.2 billion and \5,458.2 billion, respectively.
1) Transport Fares
So far, JNR's transport fares have been controlled to remain as low as possible
in line with the price stabilization policy. In order to restore equilibrium
in JNR's financial picture, however, an opportune and appropriate revision of
fares has to be made, though with careful consideration of changing socio-economic
conditions, trends in transport demand and the relationship to other means of
transportation. One of the conditions to work it out is the establishment of
a new method for revising fares so that JNR can set the revision on the basis
of JNR's own managerial judgement. Now the fare revision is a Diet matter.
2) Provincial Lines
The financial balance of the so-called local lines has worsened greatly,
remaining one of the big problems for the management of JNR. A careful deliberation
has continued to be made by the Transport Council on how to treat these lines
since the fall of 1976. On January 12, 1977, an interim report was compiled
suggesting the establishment of a sort of council through which opinions of
the local population could be reflected.
3) Freight
The deficit arising from JNR's freight service has increased so much in recent
years that a large portion of JNR's deficit is accounted for by this factor.
Efforts should be made to promote the streamlining of JNR's freight transport
in such a way as to establish an adequate transport system according the principles
of sound corporate management which will meet the volume by transport demand.
By such action, competitiveness can be strengthened.
4) Streamlining of Transportation Work
Although JNR has so far been proceeding with the plan to streamline its management,
personnel reductions during the period of from fiscal 1969 to fiscal 1976 have
only been about 44,000. To restore the healthy management of JNR, it is considered
to be vital to up-date the entire range of its operations.
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