On taking the helm at Ryobi in 1999, our top management
issue was what to do about a continuing 2% to 3% annual
decline in customers on local public transport, such as trains
On 11 December 2013, 14 years later, I stood as a
witness at the Land, Infrastructure and Transportation
Committee of the Lower House of the Diet in deliberations on
the Basic Act on Transport Policy. There, I argued the need
for this law, giving case examples of Wakayama Electric
Railway, Chugoku Bus, and Ikasa Railway, which I had
I am sure many people were surprised at seeing
me along with local residents, Tama the calico cat
‘stationmaster’, and employees happily rehabilitating
bankrupt public transport. Local transportation took
a battering with deregulation of public transport in 2000
and 2002, and I along with others had foreseen that more
than 50% of railway lines across Japan would be lost.
People at last came to recognize that we were working to
maintain a local public transport network through efforts to
have laws like the Act on Revitalization and Rehabilitation
of Local Public Transportation Systems and the Basic Act
on Transport Policy formed from the proposed Basic Act
on Transport passed by demonstrating rehabilitation of
individual transport companies centring around a Europeanstyle
On 4 April 2013, the Research Institute for Local Public
Transport was established by researchers and experts with
strong track records based on knowhow about rehabilitation
obtained by rehabilitating local transport. The Institute is
working to overcome the problems of bankrupt local public
transport, which will probably increase in the future, to
ensure we can maintain and expand local transport networks
throughout Japan, giving local people peace of mind.
The foundations for maintaining local public transport
networks depend greatly on the future of companies in the
JR group. Since I have a free rein to explain the miracle
resurgence of regional public transport I would like to talk
about how to overcome problems such as the challenges
faced by JR Hokkaido, depending on the success of the
second stage of the 1987 Japanese National Railways (JNR)
privatization and division after the first successful stage. I would also like to cover policy for moving public transport
from the defensive to the offensive.
|Benefit in Rehabilitation of Ryobi Group
as General Transportation Company
The Ryobi Group started in 1910 as Saidaiji Railway; today
(October 2014), it is a 49-company corporate group with
three core business units. One is related to almost every
aspect of land and sea passenger and freight transport
(railways, buses, ferries, taxis, logistics, and tourism),
another is related to information, and another is related to
daily life. The group employs approximately 8500 people,
has an annual turnover of ¥130 billion and pre-tax profits of
At age 28, I returned to Okayama to help rebuild the
former Ryobi Transportation. In the many years since
then, knowhow and problem awareness gained by my
involvement in rehabilitating and managing all aspects of
the transport and transportation business unit has helped
greatly in rehabilitating other companies and has lead to the
resurgence of local public transport.
Since I have rehabilitated railway and bus companies as
well as ferries, people often ask me what business I am in.
Is it railways, buses, ferries, taxis, logistics, or tourism? After
managing all of these for over 40 years, I would have to say I
am a manager of a general transportation company.
Although the Ryobi Group has been operated under
a corporate policy of not accepting national and local
government subsidies, prior to the 2002 deregulation and
based on analysis of future public transport demand we
forecast that we would fall into the red within 10 years and
our public transport business would become a burden on
the Group. This sense of crisis and an awareness of what we
needed to do was the starting point for rejuvenating public
|Japan—Only Developed Country Leaving
Public Transport Entirely to Private Sector
Although not widely known, Japan is the only developed
country to leave public transport entirely to the private sector where it has fallen into a situation I can’t but help call
Europe in particular realized that building American-style
roads and adopting automobile-centric transport policies
would lead most customers to private vehicles with public
transport becoming decreasingly important. Moreover,
they saw that building a society based on private vehicle
ownership would leave some social groups such as children
(too young to have a driving licence), the elderly (too old to
drive safely), and the poor (too short of money to purchase
a vehicle, etc.), with restricted freedom of movement. As a
result, the concept of the right of access to transport for all
citizens—the right to freedom of movement and the right
to transport—developed in some countries, like France.
These countries generally adopted a public-built/public-run
More recently, methods for guaranteeing public
transport are seeing a switch from public-built/publicrun
to public-built/private-run, using Japan’s 1987 JNR
privatization and division as the reference model. In this
system, separation of infrastructure and operations
separates the duties of government and the private operator
to keep the business profitable.
So why did Europe embrace the public-built/private-run
system? My explanation uses my own local public transport
business model. Before the age of private transport, 100
people would all use public transport so sales could be
assumed to be 100. At this time, the industry business
model was one where, assuming expenses of 90, pre-tax
profit was 10 (100 – 90).
With the arrival of the age of private transport, 50 of
those 100 people switched to using private vehicles, so sales were 50. However in terms of expenses, the number of
trains cannot be halved when the number of passengers is
halved to 50 and nor could the number of drivers be halved
if only 25 people ride a bus intended to carry 50 people.
Consequently, sales of 50 minus expenses of 90 results
in a deficit of –40, a loss-generating business model. The
public-built/private-run model evolved as a way to make this
unsustainable business model sustainable.
The Japanese government did not view local public
transport with its unsustainable business model as a longterm
structural problem. Instead, it tried to hold things
together with subsidy policies to relieve losses, chewing-up
past reserves while drastically cutting the salaries of drivers
and others working in the industry, and closing unprofitable
lines. In other words, public-transport operators were trying
to maintain the business using ‘defensive’ management. So,
I believe that the most important issue in creating a policy
is how to change the loss-generating business model into a
positive business model according to the situation.
Figure 1: Business Model for Local Public Transport
|Japan Off Course due to
Overconcentration in Tokyo
Along with deregulation of transport and transportationrelated
sectors, there are various reasons why local
communities weaken with an aging society and fewer
children. Scarce regional revenue due to tax and subsidy
reforms and decline of regional industries supporting
regional economies due to the high yen can lead to nonfunctional
communities. A policy of personal vehicle use
was promoted in inverse proportion to such weakening
of local communities, so local public transport faces difficulties in surviving. Such misdirected policies can be
seen as the result of misconceptions by intellectuals, who
themselves over-concentrate in Tokyo, along with political,
administrative, and economic leaders—that Japan is
In terms of public transport, busy people in Tokyo
use public transport rather than private vehicles thanks
to the convenience of JR East and private railway lines,
subways, buses, and taxis running throughout Tokyo.
The misconception that the standard of Tokyo and some
major urban areas is the standard for all of Japan has
caused policies to go in the wrong direction. However,
public transport is indispensible for young people who
do not have a driving licence and for the elderly for whom
driving is difficult in regional areas where a person without
a car cannot work or make a living. Even so, the lack of
understanding in such areas that private-vehicle users
may one day need to rely on public transport was the top
impediment to my movement in bringing a resurgence in
local public transport.
The main reason for the decline in public transport has
been the loss of 50% to 60% of passengers in the age of
private-vehicle use. The second reason is traffic congestion
as a result of urban sprawl, stopping bus-centred public
transport in traffic jams to the extent that buses cannot
With insufficient understanding of the differences in
transport situations in the centre of Tokyo and in regional
cities, subsidy systems have been changed and reduced for
bus operations that are generating losses in most regional
areas as a result of deregulation. Freedom to withdraw
from operations and introduction of the concept of cost
effectiveness has led to reduction and closure of lines
and bankruptcy of local public transport companies. The
problem of local public transport companies borrowing from
banks to cover losses that have expanded to many times
annual sales and cannot be covered fully by subsidies was
not grasped at deregulation.
Transportation-related deregulation was done for the
purpose of protecting the interest of users and increasing
convenience for them. Such deregulation abolished
regulation of supply and demand which protected suppliers.
Furthermore, licensing systems were greatly loosened to
become simple authorization and notification.
Such deregulation may be right for large urban areas
with heavy demand, but transport is public only in name
in regional areas, so it is no surprise that companies go
under when business becomes poor. Such businesses
were handled in the same way as ordinary companies in
other industries where lines that are no longer profitable are
As a result, central government stopped subsidizing and bailing-out most of the losses of public transport
operators and instead local governments with limited
financial resources tried to support them with the little money
they had. However, in the end, more than 30 railway and
bus companies across Japan failed in quick succession.
Even expressway bus operations started by the remaining
rail operators as the only revenue source to maintain lossgenerating
lines finally went under due to competition
from probably illegal operations by tour buses and the
introduction of ¥1000 flat-rate expressway tolls.
|Side Effects of Administration of Public
Despite being indispensible to maintaining loss-generating
public transport, two side effects of subsidies are forgotten.
One of them is creation of moral hazard in management.
As an example, Chugoku Bus—a loss-generating public
transport company that saw strike after strike and rescued
by the Ryobi Group—had bought a coach for longdistance
expressway operations for ¥10 million more than
the market price.
Fuel was being purchased at ¥10 more per litre than
normal and parts were bought at prices three times higher
than usual. Of course, interest rates on bank loans were
more than double the going rate because the business
was unprofitable. When management was asked why they
operated in such a manner, it was clear that they were
under the illusion that subsidies would decrease if losses
decreased. The moral hazard created the exact opposite of
normal management, where increasing losses would lead to
The other side effect is that subsidies encouraged discord between management and labour. Both sides lost sight of the customer because receiving government subsidies became the main objective and they stopped making efforts for the customer.
Deregulation of local public transport occurred in the midst of this situation while most operations were supported by subsidies, and about 30 bus companies went bankrupt.
I am not saying deregulation in itself is a bad thing, but
I think we are losing sight today of separating industries
requiring deregulation from industries where it should not
The illusion was created that deregulation would spur
competition in all sectors, demand would increase, and
benefits would be provided to users. And this was behind
the creation of deregulation in local public transport that is
going in the wrong direction.
In industries where supply is lower than demand
or where demand increases to a point where supply is
insufficient, deregulation increases competition, so supply
21 Japan Railway & Transport Review No. 65 • Mar 2015
Transportation Policy in Japan
increases, prices drop, and users see a benefit. However,
such effects of deregulation destroy industries where
demand is decreasing and there is oversupply.
In fact, Japan’s taxi and tour bus industries came to
suffer oversupply to a point where they almost perished. The
worsening business conditions caused tragic accidents and
led to a vicious circle.
Moreover, the incorrect theory of cost effectiveness for
public works was introduced to public transport, leading to
closure and abandonment of lines to such an extent that the
transport network is lost.
The idea of cost effectiveness is correct for public
goods in terms of exercising frugality, but can be said to be
incorrect in terms of national economy. Simply put, public
goods are services and infrastructure that must be secured
for the people, even if cost effectiveness is poor.
|Company’s Independent Efforts in
Rehabilitating Public Transport Business
I thought this was a big problem, so soon after I became
representative of the Ryobi Group in 1999, we started
independent efforts to rejuvenate public transport.
Soon after taking my post, I visited the Okayama National
Highway Office with the goal of holding public discussions
on use of public transport and fostering social movements
to promote its use. I explained the need for future national
efforts to use roads efficiently at the same time as building
new roads. I emphasized that road congestion in regional
urban areas is often heaviest during morning and evening
commuting hours, so efficient use of public transport in the
form of buses and trains is more beneficial to the national
economy than building new roads just for those few hours
The Okayama National Highway Office
was considering promoting transport demand
management (TDM) at that time, so they
sponsored the discussion panel, which was
broadcast live on local radio. A woman panellist
(representing users) knew that the percentage
of people commuting to work and school by
bus or train was less than 10%. She said that as
more than 90% of people go by private vehicle,
bicycle, or on foot, private vehicles making up the
greatest ratio of transport should be called ‘public
transport’. She stated that as trains and buses
were transporting such a small percentage,
private vehicles alone were sufficient in regional
areas. Hearing this was a tremendous shock to
me. This woman didn’t use trains or buses at
all in her day-to-day life, and she felt no need
I explained that whether there are many or few users
does not matter for public transport because it is a method
of transport that society must have for young people without
driving licences and for the elderly who cannot drive
regardless. I further explained to her that although she had
no impediment to daily life while she had her private vehicle,
she would need public transport when she becomes old
and can no longer drive, which she reluctantly accepted.
What is most worrying about the era of personal-vehicle transport is that people in the prime of life in regional areas are not keenly aware of the need for public transport.
Although they will someday rely on it, their lack of awareness that public transport is critical for mobility-impaired people who have little impact on public opinion causes an incorrect public opinion, so there is nothing to prevent deregulation and decline of regional public transport.
Other measures included holding citizens’ meetings to
promote use of public transport, introducing subsidiarybased
measures to promote bus use, introducing bus
shelters requiring no management fees (an idea from
France), creating devices that allow schedules to be seen
at the push of a button even at bus stops with no lighting,
and correcting ‘cream skimming’ between bus companies.
However, we realized that simply reinvigorating regional
public transport would not bring customers back; the key to
protecting local public transport, is to reinvigorate the whole
community and region. We found that when a community
has ‘liveliness’, public transport operators are stimulated too.
As a result, we started efforts with a community rejuvenation
movement to make walking in town more enjoyable through
use of public transport.
As part of this idea, development of a futuristic LRT
called ‘MOMO’ was commissioned to top train designer
and Okayama native Eiji Mitooka; two buildings of the 108-m high-rise ‘Grace Tower’ condominium complex
were constructed to rejuvenate Okayama city centre; and
relocation from the suburbs to city centre was proposed.
This created a model for a compact city.
Citizens’ groups eventually took centre stage, introducing
the public transport measures that Ryobi Group is working
on across Japan. As a result, we have been flooded with
requests for help in business rehabilitation.
|Proving Archetype Public-Built/Private-Run
Model by Managing Tsu Airport Line
The first request came not from public transport, but for a
plan for five sea routes between Tsu City in Mie Prefecture
and Chubu Centrair International Airport in Nagoya.
No local companies were willing to cooperate, so I was
consulted on a pro-bono basis. I proposed:
• Five routes in the prefecture would be impossible due
to low demand.
• Only the route from Tsu City was feasible even with
low demand. It could work if boats, port, waiting
areas, and parking lots were built with public funds
and operation was run by the private sector.
• Responsibility is unclear and decision-making is
slow with a joint public-private venture, so operation
should be by a completely self-financed privatesector
No company with experience in sea operations
responded to the public bid, so the Ryobi Group ended up
taking the job and starting operation as the ‘Tsu Airport Line.’
However, there was an illusion that lines to other cities in
Mie Prefecture would be feasible due to the heavy business
with the opening of Chubu Centrair International Airport in
Nagoya and the holding of the Expo. Yokkaichi, Matsuzaka,
and Ise cities opened routes with no real policy in place
and all ended in termination. The three city mayors and
prefectural governor have since left office. The Ryobi Group
is working now to rehabilitate the route to Matsuzaka City.
Figure 2: Tsu Airport Line
Photo:’MOMO’ LRT car (Designed by EIJI MITOOKA+DON DESIGN ASSOCIATES)
Photo: Tama train (Designed by EIJI MITOOKA+DON DESIGN ASSOCIATES)
Photo: ‘Tama Museum’ renovated Kishi Station with a cat motif (Designed by EIJI MITOOKA+DON DESIGN ASSOCIATES)
Photo: Ichigo (strawberry) train (Designed by EIJI MITOOKA+DON DESIGN ASSOCIATES)
Photo: Omocha (toy) train (Designed by EIJI MITOOKA+DON DESIGN ASSOCIATES)
Photo: The author and Tama The Stationmaster Cat on the Tama train (Wakayama Electric Railway)
|Rehabilitating Wakayama Electric Railway
Featuring Tama The Stationmaster Cat
using Public-Built/Private-Run Model
As the public-built/private-run model for the MOMO LRT
and Tsu Airport Line became known, we were consulted by
a local citizens’ group about rehabilitating Nankai Electric
Railway’s Kishigawa Line. Analysis showed that rehabilitation
would be possible if the line’s annual losses of ¥500 million
could be reduced to less than ¥82 million by:
• Using a public-built/private-run model
• Using a completely self-financed private-sector
company as the operator instead of a joint publicprivate
• Increasing convenience using recommendations
from an operating committee made up primarily of
Wakayama Electric Railway users Such a method is difficult under current law, so the authorities worked hard to accomplish it in an extralegal manner, because this was the only way to keep the regional railway.
The background to the success of the method included:
• The citizens’ group deployed a true citizens’
movement covering both practical and psychological
elements under the slogan of ‘ride and retain the
• Having a firm government support mechanism
• Slight population increase with rehabilitation of
Wakayama Electric Railway.
• Coordinating the work of employees, management,
and even Tama The Stationmaster Cat As a result, the line rehabilitation went well and the
railway achieved a strong sense of presence by holding 80
events a year, including running a ‘strawberry train’, a ‘toy
train’ and promoting Tama The Stationmaster Cat who has
an annual economic effect of ¥1.1 billion with visitors from
Hong Kong alone topping 26,000 in 2013. The Tama The
Stationmaster Cat phenomenon highlighted the problem
of regional public transport across Japan and created
momentum in rehabilitating regional railways. In rehabilitating the railway, we discovered that the
public-built/private-run model is effective and it was picked
up quickly by the national government. Design elements and topicality are important in
rehabilitating regional railways. The Ryobi Group asked Eiji
Mitooka, who was involved in design of the MOMO LRT, to
be design advisor. He has designed most of our vehicles—
trains, buses, ferries, taxis, and others. Efficiency in how to carry as many passengers as possible is important for vehicles serving large urban
areas but in regional areas, artifices, design elements, and
topicality are important in getting people who would not
ordinarily use trains and buses to use them. Using artifices
to make vehicles more fun could help revitalize regional
Figure 3: Some of Ryobi Group’s Vehicles
|Side Effects of Subsidies Proven by
Rehabilitation of Chugoku Bus
When the course for rehabilitation of Wakayama Electric
Railway was set, the then president of Chugoku Bus in
neighbouring Hiroshima Prefecture came to talk with me 3
months before the business went bankrupt. As there was no
operator in Hiroshima Prefecture to save the company, he
came to Ryobi Group in neighbouring Okayama Prefecture.
After a serious accident in 2000, Chugoku Bus had been
blasted by national broadcaster NHK for its ‘burning
expressway buses’, and it had developed a bad name for
more than 12 labour disputes a year. It was considered
impossible to revitalize, but seeing the resolve of its
president, we took on rehabilitating the company as I felt
something terrible would happen if we did not.
As a result of the efforts of employees and executives
and cooperation by government and citizens, we reduced
subsidies of more than ¥100 million a year in FY2008,
reduced accidents to 1/8 of the peak, and reduced
complaints by 40%. From this, I can say we did a good job
at rehabilitating the company. In the process, I realized that
the previously described side effects of subsidies and poor
labour relations were losing customers, so I proposed the
Subsidies for loss-generating operations are medicine
that only prolongs the inevitable. I discovered that most lossgenerating
lines were not strong enough to take the medicine.
|Legislation for Rehabilitating Regional
Earlier, I said I was an expert witness to a Diet committee.
In fact, it was proof from the public-built/private-run model
with Tsu Airport Line and rehabilitation of Wakayama Electric
Railway that provided the opportunity for legislation on
the public-built/private-run model to be put together for
railways. When we took-on rehabilitation of Chugoku Bus,
regional Diet member came to thank us for saving the
region’s public transport, but I told him that more than half
of Japan’s regional transport routes would fail at this rate.
I also said that this is likely the result of misconceptions
propagated by politicians. Subsequently, he put efforts into
setting up a subcommittee on regional public transport
in the Land, Infrastructure and Transport Division of the
Liberal Democratic Party (LDP). I was invited to the first
subcommittee meeting where I spoke on the incentive of
subsidies and on stimulating public transport. Just 7 months
later, the Act on Revitalization and Rehabilitation of Local
Public Transportation Systems was passed in October. While
funding was meagre at just ¥19 billion, it was a blessing to
cash-strapped local governments and operators.
This legislation put a variety of support systems
in place and provided the opportunity to review regional
public transport, but it was far from sufficient. It was just the
start. Cooperative subsidies are welcomed by profitable
companies, but they do not function for regional companies
operating loss-generating lines. They faced a situation
where barrier-free facilities, environmental measures such as
CNG, and information technologies, such as IC fare cards
and bus location systems, could only be introduced in large
urban areas, such as Tokyo, Osaka, and Nagoya.
On observing the situation with buses in South Korea, I
realized that in the Japanese system the division of roles and
responsibilities between the government and private sector
is unclear. We are suffering from the malady of relying on the
‘shot in the arm’ of subsidies to make up for losses.
Learning from the example of rehabilitating Wakayama
Electric Railway, legislation for public ownership and private
operation was introduced for railways. And from the example
of rehabilitating Chugoku Bus, legislation was introduced for
adding incentives to subsidies.
My proposals were noted in the LDP manifesto covering
securing funding for rehabilitation of local public transport
as the right to transport, but the administration subsequently
changed. The Democratic Party of Japan (DPJ), who took
over from the LDP, hardly mentioned public transport in its
manifesto and promoted an exactly opposite policy where
expressways were made toll-free to promote use of private
vehicles. Under such a policy, local public transport networks
would lose even more. In September 2009, I asked the local
DPJ representative, ‘What from the people’s perspective, is
the economic effect of making ¥2.5 trillion in expressway
tolls free or ¥700 billion if all regional public transport—
land and sea—were made free?’ He subsequently made
a recommendation to then parliamentary secretary of the
Ministry of Land, Infrastructure, Transport and Tourism
(MLIT) and a conference to investigate the Basic Act on
Transport was held at MLIT where I explained that superficial
measures will not fix the problem and that comprehensive
reform is needed. My suggestion was immediately adopted.
It was studied by a working group on the Basic Act on
Transport in November 2010, cabinet approval was gained
in 2011, and the three major parties agreed to it. However,
the administration subsequently changed again.
|Humanitarianism as Basis for Right to
The trump card for regional public transport is the publicowned/
private-run model, but there was criticism from the
start that this was completely socialist. This is an urban
notion that neither reflects understanding of the situation
in regional areas nor the mission of public transport. The model can be said to be the minimum means of social
movement that secures the right to transport of residents
in regional areas with increasingly elderly populations, so it
would be more correct to label it humanitarian. Some people
are concerned that recognizing the right of movement will
lead to lawsuits across Japan, but this only clarifies that it
is within the range of basic human rights. People have the
ability for movement from the start, so this probably would
not fall within the scope of litigation.
This comes within the scope of social rights and the right
of people to live with ‘minimum standards of wholesome and
cultured living’ stated in Article 25 of Japan’s constitution.
In provisions for the country’s social mission, measures for
mobility-impaired people who face handicaps in particular
must be considered by the nation. This is common-sense
action in any developed country.
|Suspension of Business by Ikasa Railway
19 Days After Announcing Failure Spurs
Government to Action
A press conference in October 2012 announced the failure
of Ikasa Railway (then only operating a bus business), and
business was suspended just 19 days later, wiping out bus
lines west from Okayama Prefecture to part of Fukuyama
City in Hiroshima Prefecture.
Previous bankruptcies required filing for suspension 6
months in advance, leaving time for voluntary liquidation,
appearance of a ‘white knight’, and other measures to avoid
complete loss of local public transport. Consequently,
nobody noticed this was an urgent problem.
This time, the national, prefectural, and city governments lost no time in requesting urgent support from the Ryobi Group and just 19 days later, on 1 November, we gave support using an urgent replacement operation. From this experience, we learned that it would be difficult to save the company under current law. It also goes without saying that it would be very difficult in terms of financial resources.
The old style of running public transport is the publicbuilt/ public-run model, but the current style in Japan is private-built/private-run; the public-built/private-run and
public-built/private-commissioned rehabilitation methods fall between the two. In this, the government role is to build and the private sector is to operate directly or by commission.
This method is effective for rehabilitating public transport. This could not be done by conventional subsidy administration because subsidies are paid after the fact. So,
even if rehabilitated, financing would not last. Subsidies are used basically to compensate for losses, so a company that does not generate profit can be considered impossible to rehabilitate.
The sudden failure of Ikasa Railway worried locally elected Diet members, and the Basic Act on Transport,
which had not progressed since being abandoned, started
to see progress again as the Basic Act on Transport Policy.
As a witness at the Land, Infrastructure and Transportation
Committee of the Lower House of the Diet on 12 November
2013, I spoke on the progress so far and the need for a
basic law. The fact that the bill was passed and approved
on 27 November, despite administrations changing, was
thanks to the Diet members and bureaucrats well-versed
in the situation of regional areas understanding community
problems and feeling that they had to do something about
local public transport. I am very grateful for this. If the bill
had not passed, we would not have been able to rehabilitate
transport in the Ikasa Railway operations area.
|Using Public Transport Saves Nation
Public transport is more than just a means of protecting
mobility-impaired people. It is also effective in areas such
as preventing walking difficulties and dementia in the
elderly—major problems in an extremely aged society—
and in alleviating health problems of people who rely too
much on automobiles. I also believe that changing the local
public transport industry from one that is on its last legs to
one with hope is an important point in maintaining Japan’s
|Being Major Force in Environment-
Friendly Public Transport
It is important that we change local public transport
measures from those to just prolong the life of failing
companies to those offering hope for the next generation.
Consequently, I am promoting an initiative to make Japan a
major force in environment-friendly public transport.
believe it is important how we reform to use LRT and
electric buses, introduce information technologies, and
change into an industry with hope for the next generation.
I am sure this initiative could be a resource for making
Japan a country that could boast the most functional and
environment-friendly public transport in the world. This can
be achieved with a national project costing ¥2 trillion over 10
years carried out mainly in core urban areas at ¥200 billion
The wise choice would be to develop into a 21st century
industry that exports its environment to the world instead of
just conducting patchwork measures to save Japan’s public
transport. The syndrome of worrying that we don’t have the
money has become too prevalent, and we lack a clear vision
for the future, preventing policy from being implemented.
However, regeneration of provincial areas could be a key
in overcoming this. I believe the only method for obtaining sources of revenue is making higher taxes on cars and fuel
into general taxes. Since use of private vehicles stole the
value of public transport and private vehicle users will one
day rely on public transport, it would be best to apply road
taxes to public transport.
I hope to see local public transport shift from being
on the defensive. By making Japan a major force in
environment-friendly public transport, cities across Japan
will be showrooms to the world, advanced computerized
and systemized export industries such as LRT and electric
buses will be born, stimulating Japan’s industry to provide
solutions to the world’s problems in aging societies,
environment, and health.
|JR Group as Key to Forming Network of
Regional Public Transport
The foundation of Japan’s highly developed public transport
is still centred on the privatized JR group of companies. The
old JNR was privatized and divided in 1987 mainly to find
a solution to tremendous accumulated debt and rampant
labour unrest. It could be called one of the few great
privatization successes in the world.
However, it has not been infallible and involves the
• The scheme to support stable management is
crumbling as the long-term prime rate for the
Management Stabilization Fund has dropped from
an initial 5.2% to about 1.2% and operators such as
JR Hokkaido serving under-populated areas do not
see any increase in operating profits and are being
forced to streamline further and take money directly
from the fund.
• Securing safety by track maintenance and the like
is becoming a problem at companies such as JR
Hokkaido due to reasons such as financial difficulties.
This is a problem that fundamentally affects lives,
and the JR group of companies needs to secure
standardized universal safety.
• Provincial regions have been forced to choose
between developing new shinkansen lines and
maintaining conventional lines. It is a self-evident
truth that two loss-generating operations with both
new shinkansen lines and conventional parallel lines
cannot be sustained. While both losses are the same
in terms of management, the fundamental highspeed
rail operation of new shinkansen lines cannot
be debated on the same level as lines supporting
people’s day-to-day lives. Today, with the revision
and passing of the Basic Act on Transport Policy
and the Act on Revitalization and Rehabilitation of
Local Public Transportation Systems, public transport networks must be maintained as national projects. At
this rate, the nationwide high-level railway network will
be divided, and there are problems with maintaining
the network in terms of funding even if lines are
transferred to local communities.
In my opinion, measures to solve these management
• Establish JR Holdings (JRHD) and put individual JRs under JRHD control.
• JRHD to centrally manage all assets and uniformly manage maintenance.
• Operators to secure safety and services.
• JRHD to centrally manage JRs’ transport network and maintain as trunk lines.
• National and local governments and JRs to work as one for lines used by people on daily basis,
supporting regional development in cooperation with regional public transport. Establishing JRHD with fundamental and centralized
management would work as the second stage of JR
privatization to solve various problems. Unification could
also benefit users.
The Basic Act on Transport Policy contributes greatly to
maintaining and advancing transport in general in addition
to regional public transport and we now hope—along with
Tama The Stationmaster Cat—that a resurgence in regional
public transport will see major progress in securing