Chapter　5 　Reconstruction of the Japanese National Railways

5. 1　Present conditions

　 　The administration of the JNR since the first deficit in fiscal 1964, has continued to deteriorate so that the net loss in fiscal 1983 reached ￥1,660 billion. As a result at the end of fiscal 1983 the cumulative deficits reached ￥10,625 billion and long-term loans stood at ￥19,983 billion.

5. 2　Grappling with the Problem of Reconstruction


　 　The Management Improvement Program was approved in May 1981, but due to subsequent changes in circumstances, further changes had to be approved by the Minister of Transport in May 1984.
　 　The Supervisory Committee for the JNR Reconstruction in August 1984 submitted to the Prime Minister "the Basic Principles of Emergency Measures required for the reconstruction of administrative objectives in enterprises being administered by the JNR (Secondary provision)" which included the division of the system for eventual private administration in substance as the final overall objective in mind, clearly defining "the basic concept for reconstruction of the JNR" with concrete proposals concerning the disposition of personnel, etc. as"emergency measures requiring immediate disposition".
　 　In receipt of such recommendations, the goverment has immediately obtained cabinet approval to give this top priority and promote of further important required measures.
　 　The Ministry of Transport has also set up an emergency headquarters for the implementation of emergency measures for the reconstruction of JNR and, with respect to "the basic concepts for reconstruction of the JNR", determind to conduct further studies to reach an appropriate conclusion with the cooperation of the Supervisory Committee for the JNR Reconstruction, and push forward "emergency measures requiring immediate disposition".

5. 3　Promotion of Emergency Measures

　 　The Supervisory Committee's consideration of drastic measures has been accompanied by emergency measures designed to prevent the further deterioration of JNR administration through the implementation of the following on a very positive basis.
(1)　Establishment of workshop discipline
(2)　Proper consolidation of operations
　 　A. Freight transport
　 　 In the Promotion of efficiency in freight transport, the revision of time schedules in February 1984 instituted express transport systems between key positions involving at the same time,the reorganizing of freight handling stations (460 stations).
　 　B. Countermeasures for local railway lines.
　 　Local railway lines which find it hard to break even have been a heavy burden on the JNR administration (Fig. 11).
　 　Specific local railway lines, the transport demand for which is exceedingly small, must necessarily be switched to bus transport, etc. and 10 lines out of the first-stage 40 lines have been switched to alternative means of transport withan additional 27 lines being selected and approved at the second stage.
(3)　Improvement of efficiency rating of operations
　 　In fiscal 1983, personal was reduced by 43,500 persons(originally planned 28,900 persons), far more than anticipated.
(4)　Reconsideration of tariffs
　 　Tariffs were revised in April 1984 for an average increase of 7.8%(passengers 8.2%, freight 4.2%).
　 　One passenger tariff for the whole nation was a principle revised this time and metropolitan tariffs (Tokyo/Osaka urban lines) compared to trunk line rates were held down, with local railway lines tariffs increased 6.5% with the introduction of separate increases added to specific tariffs in other local areas.
(5)　Associated enterprises and disposal of assets
　 　Income from associated enterprises increased 12% over the previous year in fiscal 1983 to reach ￥83 billion.
　 　Income realized from disposal of assets in fiscal 1983 increased 135% over the previous year for ￥166 billion.
(6)　Restraining investment in facilities
　 　Investment in facilities with the exception of particular investments involving the securing of safety through required replacement of aged equipment for which replacement was urgent, was again restrained in principle to ￥751 billion (reduction of ￥137 billion from the previous year in fiscal 1983) and the fiscal 1984 budget calls for ￥566 billion (reduction of ￥140 billion from the previous year).

5. 4　Important Problems Pending

　 　In the 2nd emergency proposal of theSupervisory Committee for the JNR Reconstruction, basic concepts of questions concerning efficient operational formats and long term loans have been indicated and the Ministry of Transport more or less agrees with the concepts indicated by the Supervisory Committee with respect to the drastic measures indicated.
　 　Henceforth, together with the creation of efficient administrative formulas, the following problems are particularly important.
(1)　Problems of long term loans
　 　The long tern loans of JNR in fiscal 1983 amounted to ￥20 trillion and the burden of interest in fiscal 1983 amounted to ￥1.4 trillion (actual interest burden after subsidy was ￥840 billion) and sorely burdens operations (Fig. 12). Therefore, a drastic solution is necessary.
(2)　Problems of redundant personnel
　 　Adjustments in employment consisting of the institution of employment holidays and the dipatch of employees to alternative employment, etc. have been practiced, but with the inception of a committee devoted to this problem, further serious measures must be instituted.
(3)　Problems related to the burden of pensions
　 　The problem of the burden of pension payments concerns serious repercussions or* the administration of the JNR and the evolving of an appropriate solution is the object of serious study.
(4)　Large scale projects
　 　With respect to the Aomori-Hakodate tunnel and the bridges connecting Shikoku and the main island, problems of the charge anticipated from use of the tunnel and bridges upon completion, require the final decision of the Supervisory Committee for the JNR Reconstruction after which appropriate solutions shall be implemented.

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