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(1) Financial Situation of JNR
The JNR management has continued deteriorating since it recorded a deficit
in the single fiscal year of 1964. As of the end of fiscal 1982, JNR registered
a cumulative deficit totalling ￥8,964.6 billion with the outstanding amount
of long-term debts running into ￥18 trillion. The payment of the interest for
these loans has pressed hard on the JNR's financial positions (Table
7).
(2) JNR's Present Reconstruction Plans
Under the Management Improvement Program (the so-called final program), authorized
on May 21,1981 by the Minister of Transport on the basis of the JNR' Reconstruction
Promotion Special Law, the JNR is endeavoring to promote various reconstruction
plans with emphasis on a financial improvement and the trimming of management.
The Ad Hoc Commission on Administrative Reform, established toward the
end of fiscal 1980, worked out in July 1982, a policy of dividing JNR and transferring
its management to the private sector in a drastic move to end its present status
as a public corporation so that JNR will be run in a more responsible and more
efficient way.
The commission also stressed the need to maintain more rigorous workshop disciplines,
call off recruitment of freshmen in principle, restrict equipmetnt investment
and abolish deficit-ridden local railway lines, as urgent steps to be carried
out pending a shift of JNR management to the private sector.
The commission further said that problems such as long-term debts and JNR
mutual aid annuity must be solved in making such a shift feasible and that a
"Ministerial Council on JNR Reconstruction" and a "Supervisory Committee on
JNR Reconstruction" should be set up within the Cabinet and the Prime Minister's
Office, respectively, in order to push for JNR reconstruction.
Meanwhile, the government issued in September 1982 an emergency declaration
regarding the JNR management. At the same time, the government decided, at a
cabinet meeting, to formulate total plans for JNR reconstruction for implementation
within five years along the line of recommendations made by the Ad Hoc Commission
on Administrative Reform, on JNR restructuring, and to establish, to this end,
the Ministerial Council on JNR Reconstruction headed by the prime minister.
In June 1983 the Supervisory Committee on JNR Reconstruction was inaugurated
as a result of enforcement of the JNR Reconstruction Promotion Special Law.
The Supervisory Committee on JNR Reconstruction submitted to the prime minister
in August 1983 "basic plans for implementation of urgent steps to improve the
management of undertakings run by JNR."
The plans set forth concrete measures based on three perspectives, that is,
"rationalization of management administration," "liquidation of undertakings,"
and "rectification of the business balance and control on increase in debts."
These emergency steps were definitely reflected in the government's budget
for fiscal 1984, and it has been urged that they be implemented by fiscal 1985
with the exception of those whose target fiscal years are already set.
(1) Progress in Implementation of Management Improvement Plans
At present JNR is wrestling with the task of implementing management improvement
plans in an effort to rationalize management administration, reduce expenditures,
restrict equipment investment and secure increase in revenue. For all such endeavors,
JNR's net loss amounted to ￥1377,8 billion in fiscal 1982. In order to provide
the basis for healthy management, there is the need for JNR to carry out more
elaborate plans. JNR has thus decided to push for a study about the possibility
of further modifying the present management improvement plans.
(2) Problems such as Long-Term Debts and Large-Scale Projects
If left unsolved, problems such as long-term debts, construction cost involving
large-scale projects, including construction of the Seikan Tunnel, and the financial
burden of the JNR authorities for Mutual Aid Association of the JNR are expected
to have great impact on the management of JNR. Because of this, these problems
with be taken up for discussion by the Supervisory Committee on JNR Reconstruction
together with problems concerning the transfer of the management of JNR to the
private sector. The Ministry of Transport, for its part, will actively cooperate
with the committee and tackle the problems on the basis of such discussions.
(3) Problems Vital to Acceleration of Improvement of JNR Management
| (a) | Establishment of Workshop Disciplines Overall checks on workshops will be conducted about twice a year in a bid to improve their disciplines on a permanent basis. |
| (b) | Management on Priority Basis |
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i)
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Switch in freight transport system In order to give full play to its merits of freight transport services, JNR must totally abolish the inefficient system in which freight is assembled at yards prior to their transportation and make a sweeping switch to a new system in which freight is directly transported to their key destinations. At present JNR is exerting efforts to do so in the hope of attaining a balance of income and expenditure in freight transport services by fiscal 1985 (Fig. 10). |
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ii)
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Countermeasures for local railway lines In regard to local lines (in principle, lines with less than 2,000 passengers trasported a day on an average), which it is considered appropriate to replace with bus lines view of their extremely limited demand and from a standpoint of national economy, the Minister of Transport approved of first-stage abolition of 40 lines m September 1981, and at present the Ministry of Transport is negotiating with the local residents who will be affected by such actions To date, agreement has been reached on replacement of several lines with bus services In November 1982 JNR filed a request with the Minister of Transport for approval of second-stage abolition of 33 lines (Fig. 11) |
| (c) | Modernization and Rationalization of Management As a result of vigorous enforcement of management modernization plans in fiscal 1982, a total of 26,550 JNR personnel were retrenched, though 1,650 additional personnel were recruited with the opening of the Tohoku and Jyoetu Shinkansen Lines. After all, there was a reduction of 24,900 personnel In fiscal 1983 JNR plans to curtail 28,900 personnel and to continue in fiscal 1984 not to recruit new personnel |
| (d) | Restriction on Equipment Investment JNR makes it a basic rule to refrain from carrying out equipment investment except m the maintenance of safety Because of this, JNR projects have been scaled down m the fiscal 1983 budget |
| (e) | Securing Revenue As regards fares which form the primary sources of revenue from transportation services, JNR is currently studying the possibility of reexamining the existing system, mainly fare system for railway lines operating in big cities and local areas, with factors such as competitive relations with other means of transportation and by-line prime cost taken into account. |
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Annuity Measures
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