Chapter 2  Reform of Japanese National Railways


2. 1 Actual Status of JNR Operations and Path to JNR Service Reforms


   JNR's net loss for fiscal 1985 reached a huge sum of \1.847,8 trillion. Its cumulative loss at the end of fiscal 1985 totaled about Y14 trillion, and its long-term debts about \24 trillion. JNR's reform has therefore become the most urgent national task.
   On the basis of the recommendation of the Supervisory Committee for the JNR Reconstruction, and in line with management improvement plans, the Ministry of Transport and JNR have been taking emergency measures, including re-employment of its personnel, reform plans for local lines, revisions in train schedules and rares, restraint on investments in facilities and equipment's, and effective use of land.



2. 2 JNR Reform by Division and Privatization


(1) Enactment of JNR Reform Bills and Start for New Management Form
   A package of eight JNR reform bills was enacted at the 107th session of the Diet, thereby paving the way for the close of JNR's 115-year history as a state-run corporation on April l, 1987. Thus, JNR's role and operation will be carried over to six passenger companies, one freight company, one Shinkansen-holding corporation, and other organizations. (Fig. 10)
   After the enactment of the JNR reform bills, the Government and JNR immediately began necessary preparations for smooth transfer to a new system, and the work is now under way.
(2) Prospects for Railway Service after Division and Privatization and Future Tasks
   @Prospects after Enforcement of Reform
At the inception of their services, the new companies are requested to rationalize their management setup as far as possible and inherit the long-term debts so long as such inheritance will not cause any inconvenience to their sound and smooth management. (The new companies in Hokkaido, Kyushu and Shikoku will be exempted from inheriting the long-term debts; management stabilization funds will be created for these companies.) Thus, the new companies will be able to secure a stable business foundation and carry out a sound and vigorous business operation by making further management efforts. (Table 1)
   The new companies are expected to provide the following services:
   (i) The passenger companies will place emphasis on medium-distance, inter-city transport, as well as on the transport of commuters and students in major urban areas; the freight company will place emphasis on long-distance, mass transport. Both passenger and freight companies will contribute to creating efficient traffic networks in response to their users' needs.
   (ii) The new companies are also expected to contribute to regional development in harmony with regional communities by providing traffic services emphasizing local interests, keeping close contact with regional communities and activating the local lines.
   AResponses to Important Tasks Related to Reform
   The long-term debts will belong to a new liquidation company, which will settle them with JNR's portion of the long-term debts which may not be covered by its own funds will finally be settled by the state. To minimize the final burden on the state, the liquidation company will endeavor to create as much disposable land as possible and increase the added value of such land. Before estimates can be made on the final settlement and fiscal steps for the settlement are studied and decided, a state subsidy will be provided to the liquidation company so long as the national treasury permits.
   As for the employment of its personnel, JNR is trying to find jobs for those willing to leave JNR and work in other enterprises. JNR has also accepted applications for voluntary retirement. For employees to be transferred to the liquidation company on April 1, 1987, a comprehensive and systematic measure will be taken to enable all of them to be re-employed within three years.
   The JNR mutual aid pension system will be placed in a difficult situation as a result of the reduction in the number of employees and the increase in the number of pension recipients after the reform is carried out. Studies are under way to ensure that smooth payments can be made now and in the future.
   BFor Successful Reform
   The reform of JNR, which plays a vitally important role in the nation's transport system, is a pressing and imperative national task in view of its critical financial situation. This reform, therefore, must be carried out by all means.
   The Ministry of Transport is determined to tackle this reform with all its power to open a new vista in railway transport through the understanding and cooperation of the nation

 


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