WITH A general election due in Japan this month, the President of Central Japan Railway Yoshiyuki Kasai has renewed his attack against government plans to sell its remaining shares in the JR companies. Although the government has already indicated that it does not expect to push through a bill for full privatisation of JR in the present session of the Diet (RG 4.00 p212), Kasai is clearly keen to warn that any future attempt will meet with strong opposition.
JR Central is circulating an article which appeared in the economic weekly Toyo Keizai just before the government’s latest climbdown. In it, Kasai refers to ’the paradox of privatising a public corporation’, and highlights three ’life support systems’ included in the reform that gave birth to the JR companies in 1987.
One is the arrangement for the profitable Tokaido shinkansen to subsidise the shinkansen routes of JR West and JR East in such a way that ’passengers on the Tokaido shinkansen pay not only for the line’s inherent cost of service but also as much as 20% extra for this subsidy policy’. The second is the ’management stabilisation fund’ set up for the JR companies on the islands of Hokkaido, Shikoku and Kyushu, which Kasei describes as ’a twist on market logic and economic rationality stemming from political considerations’. The third life-support system is the effective subsidy of JR Freight by ’extremely low track access charges’ from the passenger companies - ’yet another example of market mechanisms being altered by the political necessities’.
Kasai believes ’it is time to confront the facts about JNR reform’. Pressing ahead with ’complete privatisation’ would, he points out, ’mean the elimination of all the political considerations buried in the existing framework, transforming it so that it conforms to market logic.’ But he warns that ’the delicate consensus formed by ... taxpayers, users and shareholders ... would have to be rebuilt from scratch.’ Warning that the government would only be perpetuating ’the harm of JNR’, he says that ’avoiding difficulties by leaving intact the current politically-tainted framework while selling off the government’s remaining holdings in the JR companies, and pretending that market principles are thus being obeyed, demonstrates nothing but a wish to avert one’s eyes from the truth and to postpone dealing with the problems.’
Kasai says ’efficient and flexible operation will be the greatest real benefit of privatisation’, concluding that ’the JR companies of today can be said to be sufficiently achieving the expected benefits.’
