Japan’s semi-public railways bleed red ink

According to the Asahi Shinbun, almost half the semi-public railways in Japan, which were established by local governments in 1987 when Japanese National Railways privatized into JR and dropped unprofitable rural routes, are in serious financial trouble:

Of the 28 “third-sector” train companies still in operation, 13 have always posted losses and two have run out of funds designed to cover their deficits, the survey found.

With five other companies expected to drain their deficit-covering funds between fiscal 2006 and 2009, four companies face the prospect of having their financially ailing train lines scrapped, the survey found.

The deficit-covering funds consist mainly of state subsidies of 30 million yen ($249,470) per kilometer of a train route given when the third-sector train companies were established, and investments from municipal governments along the train routes.

Here are the troubled railroad companies that the article specifically mentions:

• Yamagata Tetudou Co. in Yamagata Prefecture: unprofitable since its establishment.
• Gifu Prefectures’ Akechi Railroad Co: 50 million yen in operating losses for fiscal 2005. It used up all of its deficit-covering funds of more than 300 million yen by fiscal 2003. Currently surviving on subsidies and loans from local governments along its routes.
• Miki Railway in Hyogo Prefecture: 63 million yen in operating losses for fiscal 2005, has also run out of deficit-covering funds. Currently surviving on subsidies and loans from local governments along its routes. Funds could be depleted by the end of fiscal 2006. [municipal governments that support it are discussing the abolition of train routes.]
• Mooka Railway in Ibaraki and Tochigi prefectures: about 55 million yen in deficit-covering funds as of March 2006
• Hojo Railway in Hyogo Prefecture: 8.1 million yen in deficit-covering funds left. Funds could be depleted by the end of fiscal 2006.
• Sanriku Railway Co. in Iwate Prefecture: expects to use up all of its deficit-covering funds in fiscal 2007.
• Tenryu Hamanako Railway Co. in Shizuoka Prefecture: expects to use up all its deficit-covering funds in fiscal 2008.
• Wakasa Railway in Tottori Prefecture: expects to use up all its deficit-covering funds in fiscal 2009. [municipal governments that support it are discussing the abolition of train routes.]
• Tarumi Railway in Gifu Prefecture: relies on local government funds to prop it up. [municipal governments that support it are discussing the abolition of train routes.]
• Isumi Railway in Chiba Prefecture: public officials are discussing plans for the company, including the possibility of scrapping its service.

Train service, even if unprofitable, is a government spending program I can support. If you rely on one of the train lines, you better hope that your municipal government cares more about its train service. One of the greatest things about Japan is its extensive rail network, and it would be a real shame if these countryside lines disappeared. [Especially for JET program teachers who need those trains to take weekend trips out of the inaka!]