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The JNR's deficit in fiscal 1984 reached a huge sum of \1 trillion 650.4
billion. Its accumulated losses totaled about \12 trillion, and its long-term
debts about \22 trillion, at the end of fiscal 1984. The JNR reform is now an
urgent national task. (Table 1)
The Ministry of Transport and the JNR are vigorously carrying out such emergency
measures as the reemployment of its redundant labor force, abolition of deficit-ridden
local lines or transfer of such lines to the private sector, rationalization
of its personnel and disposal of its assets.
(1) "Advice on JNR Reform" by Supervisory Committee for the JNR Reconstruction
On July 26, 1985, the Supervisory Committee for the JNR Reconstruction submitted
to the Prime Minister its "Advice on JNR Reform", which contains the following
points:
①Basic concept for reform
The JNR cannot be reformed into an organization capable of continuing sound
and vital management in the future without resolving the problems inherent in
its present management form operating as the single national organization under
a public corporation system which is apt to lack the independence. The proposed
division and privatization plan of the JNR are based on this concept. (Fig.
4)
②Establishment of efficient management form
(i) Division
The JNR's passenger section will be divided into six companies, i.e., three
in Honshu and one each in Hokkaido, Shikoku and Kyushu. The Shinkansen lines
will be collectively held by one company. (Fig.
5)
The freight section will be separated from the passenger section to become
an independent company.
(ii) Privatization
The JNR will first become a special company wholly invested in kind, and
will be privatized by gradually selling its stocks.
3 Problems related to JNR reform
(i) redundant labor force
About 93,000 JNR employees will become redundant as a result of the reform.
Before the JNR switches to a new management form, about 20,000 applicants for
voluntary retirement will be invited; about 32,000 persons will be transferred
to new companies for passenger transport; and reemployment efforts will be made
for about 41,000 persons in the former JNR. The Government will set up a reemployment
promotion headquarters to help them find new jobs, while taking necessary legislative
measures.
(ii) Settlement of long-term debts
The JNR's long-term debts total approximately \37 trillion 300 billion.
The new companies will be obligated to repay these debts as much as possible,
provided the repayment will neither upset their balance sheets for the present
nor endanger their sound management in the future. The remainder will be kept
at the former JNR and repaid as much as possible with funds raised through the
sale of its assets, including unused land. The ultimately remaining long-term
debts (about \16 trillion 700 billion) will be settled at taxpayers' expense.
4 Time of reform
The division and privatization of the JNR will be carried out on April 1,
1987.
(2) The Government's responses to JNR reform
1 Establishment of promotion system
At the Cabinet meeting on July 30, 1985, the Government decided to respect
as far as possible "the Advice on JNR Reform" submitted by the Supervisory Committee
for the JNR Reconstruction. At the same time, the Government set up "a Council
of Ministers Concerned with JNR Reform" to unify its activities. The Ministry
of Transport and JNR also plan to set up reform promotion systems to study specific
matters.
2 Studies of specific matters
Determined to carry out the reform in accordance with the above-mentioned
policy, the Government decided "a Basic Policy for JNR Reform" at the Cabinet
meeting on October 11, 1985. This policy spelled out guidelines for the promotion
of the division and privatization of the JNR. At the same time, the Government
decided to transfer the JNR to a new management form on April 1, 1987 and submit
a package of bills to the next ordinary session of the Diet. It is necessary
to draw up various administrative plans in specific terms along this basic policy
and take necessary legislative steps for the reform.
(3) Establishment of sound business companies
The proposed JNR reform contains the following particularly important points:
1 The reform must be carried out urgently. If the JNR is left as it is, its
debt will further increase, and its transport activities will be jeopardized.
2 To carry out the proposed reform, the division and privatization of the
JNR are a must. The division and privatization do not mean abolishing some deficit-ridden
local lines. Conversely, if efficient and revitalized railway companies are
created through these measures, better transport services would be offered to
local residents in response to local needs.
3 Not all long-term debts can be settled by the new companies and the JNR's
own funds. The remainder will have to be settled by the Government and ultimately
at taxpayers' expense. To win the understanding of taxpayers, therefore, the
new companies should make possible management effort. At the same time, the
JNR should make every self-help effort to settle its debts with funds raised
through the sale of as much land as possible.
4 In the course of management rationalization, nearly 100,000 employees will
become redundant. They need reemployment opportunities. The JNR should make
every effort to find jobs for them. The Government should take various steps
to help them find new jobs.
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