The Daily Manila Shimbun


JR Tokai helped by low interest rates in paying debts

March 31, 2017

Tokyo- Low interest rates served as a tail wind for Central Japan Railway Co. in repaying debts after the 1987 privatization and breakup of the Japanese National Railways, Yoshiyuki Kasai, honorary chairman of the company, better known as JR Tokai, has said.

"For about three years after the privatization, we enjoyed the benefits of the bubble economy, with the number of passengers increasing some 30 pct," Kasai said in a recent interview.

Noting that JR Tokai was using profits from its Shinkansen bullet train business to repay the debts left behind from the JNR era, Kasai said his company was helped by the low interest environment after the collapse of the asset inflation-driven bubble economy.

"Near-zero interest rates were the biggest factor that allowed us to do better than we had expected," Kasai said.

During the JNR era, parliamentary approval was needed for expenditures and train fare hikes, according to Kasai.

"We were forced to compromise in the face of politics," he said. "With low labor productivity, the JNR saw its debts grow by 2 trillion yen every year."

After the privatization, JR Tokai aimed to establish a sustainable business structure that does not make losses, Kasai said. "But we never imagined a stock listing," he said.

"The privatization and breakup went really well," Kasai said. Jiji Press