"Financing Schemes to Construct Railroads in Japan"(in Japanese)

The failure of Japan National Railways (JNR) was caused by some factors, that is the competitive disadvantage in transportation, the increased high labor costs, the financial failure, and so on. In this paper, we focus on the financing schemes to construct railroads that brought on JNR's financial failure with the snowballed debt. We show the financing schemes especially to construct subways in Tokyo Metropolitan Area that mix government investment and loans. In many cases, the railroad companies had drawn funds from the central and local governments to pay partially the operation costs only after opening for traffic. But huge amounts of money are spent on the railroad construction, and railroad companies had accumulated enormous debts through the construction before opening. The principal is so large that these companies must spend most of their earnings simply on the interest and that it is difficult to reduce the large principal of the loan. Some railroad companies such as JNR must renew their loans and they are groaning under the burden of their loans. If the central and local governments invest the funds intensively in the early stage of construction, then railroad companies can construct the railroads without raising a large loan to be expended. Under this scheme the total expenditure of the railroad companies would be reduced by almost half at high interest rate. These phenomena are induced by the fact that to build and operate railroad is to struggle against interest. In fact, JR-East, a lineal successor to JNR, struggles against long-term interest rates. In this industry, it is critical in deciding the plan to formulate and establish a practical scheme to raise long-term low-interest money before railroad construction.