Japan Railway & Transport Review No. 21 (Front cover & p.3)

Front Cover

Photo: Trainees from China inspecting engineering site at Tokyo's Shinjuku Station.


Dangerous overconfidence

The irreversible political and economic changes in the last 10 years have greatly changed the former socialist countries, which are now finding their own ways of surviving in a free economy. However, it seems that people in these countries still tend to be overconfident about the railway's ability in a market-driven economy.
In the planned economies, the railway enjoyed a quasi-monopoly in carrying both freight and passengers. However, in the market-driven economies, the rapid growth of motor transport and customers' free choice of transport modes can threaten the railway's future. Some lessons should be learnt from postwar Japan where the underdeveloped road network and excessive use of rail transport during the war led people to overestimate railways. This overconfidence made it difficult to adapt to the rapidly changing transport market, leading JNR into financial difficulties from the 1960s until its final breakup in 1987.
The railway cannot be almighty in a free economy. It is essential to sort out the commercially viable parts of a railway network and to give them the freedom to operate as independent business undertakings. The non-viable parts should be trimmed as much as possible, and if they cannot be replaced by road transport, to avoid crosssubsidies from the viable parts, they should only be kept running using special arrangements with the government.
T. Suga