The government's new financial support measures for JR Hokkaido and JR Shikoku, which have many unprofitable routes and continue to be difficult to manage, have been revealed.

Incorporated administrative agencies, which are shareholders of both companies, are making adjustments to strengthen their financial base by making additional investments and by making “debt equity” to exchange the debts of both companies for shares.

The management of JR Hokkaido and JR Shikoku has become even more difficult, with the interim settlement of accounts for this year becoming the largest deficit in the past due to the influence of the new corona, but the financial support of the country based on the law is due this year. welcome.



Based on the reports of management improvement efforts submitted by both companies, the government has decided to continue financial support from next year onward.



According to the people concerned, as a new support measure, the independent administrative agency "Railway and Transportation Organization", which holds all the shares of both companies, will make an additional investment and the shares that both companies will newly issue debts. We are making adjustments by "equalizing debt" to be exchanged and subsidizing interest to be repaid to financial institutions.



In addition, the company will continue to support the management stability fund, which is being operated to fill the deficit of both companies, to secure a certain amount of investment profit, and to subsidize the repair costs of the Seikan Tunnel and Seto Ohashi Bridge. ..



After adjusting the scale of support, the government plans to submit a bill to amend the law necessary for continuing support to the ordinary session of the Diet in January next year.

What is JR Hokkaido?

JR Hokkaido, which was born by the division and privatization of the Japanese National Railways in 1987, was expected to have a large deficit from the beginning.

This is because the area is large but the population density is low, and the equipment is easily damaged by snow, which increases the cost.



Since its inauguration, the operating loss of JR Hokkaido alone has never been in the black, and the amount of deficit is more than 20 billion yen every year, and in many years it exceeds 50 billion yen.



There are 14 routes, including the Hokkaido Shinkansen, but all sections have been in the red for the sixth consecutive year until last year.

Even with the support of the government, management did not improve, serious accidents occurred one after another, and JR Hokkaido embarked on a drastic rationalization.



In 2016, after stating that 13 sections were "difficult to maintain on their own", they indicated their intention to discontinue 5 sections that are particularly rarely used, and are proceeding with discussions with local governments along the line.



Of these, the Sekisho Line between Shin-Yubari and Yubari and the Gakuentoshi Line between Hokkaido Medical University and Shin-Totsukawa have already been abolished.

Mukawa and Samani on the Hidaka Line have also agreed with the local community to discontinue the line in April next year.



Of the remaining two sections, between Fukagawa and Rumoi on the Rumoi line, discussions have been difficult due to the disapproval of some sections by local governments along the line, and between Furano and Shintoku on the Nemuro line. , Discussions between JR and local governments along the railway line are not progressing.



On the other hand, for eight sections such as Shin-Asahikawa / Abashiri on the Sekihoku Line and Nayoro / Wakkanai on the Soya Line, we have formulated an "action plan" to improve the balance of payments, and promote use and costs with local governments along the line. We are working to reduce.



Nevertheless, last year, partly due to the impact of the new coronavirus, the Group's overall operating loss was a record high of 42.6 billion yen, and management remains difficult.



【support】


Since privatization in 1987, JR Hokkaido has received financial support of more than 680 billion yen from the national government as a "management stability fund" and has used the investment profit to cover the deficit.

However, it became difficult to generate sufficient investment profits at long-term low interest rates, so it was able to curb investment for safety.



As a result, serious accidents occurred one after another from 2011 to 2013, and we received a business improvement order from the government.



In response to this situation, we have listed 13 sections as difficult to maintain independently, and have indicated that we intend to discontinue 5 of these sections, and have already abolished 2 sections.



For JR Hokkaido, which is stuck in a chronic deficit, the government has issued a supervisory order to request management improvement again and has provided support of more than 40 billion yen over two years.



[Improvement measures]


Of the 13 sections that JR Hokkaido finds difficult to maintain independently, eight sections that have not announced their intention to discontinue the line will be subsidized by local governments along the line seeking survival. We are cooperating in promoting the use of railways by going and holding events to convey the appeal of railways.



In this fiscal year, when management is worsening due to the effects of the new coronavirus, we are forced to take cost-cutting measures such as reducing the number of limited express trains, in addition to taking a "temporary return" to take employees off.

What is JR Shikoku?

"JR Shikoku", which was established by the JNR division and privatization in 1987, continues to have a severe business environment due to the progress of the development of expressways and the declining population and depopulation.



Last year, we announced the balance of each section of the railway line for the first time on average for the five years up to 2017 in order to convey the current situation where it is difficult to maintain the railway line.



According to this, 17 sections of the Seto Ohashi Line, excluding the sections of Utazu Station in Kagawa Prefecture and Kojima Station in Okayama Prefecture, are in the red.

The most profitable of these is the section between Kita-Uwajima Station in Ehime Prefecture and Wakai Station in Kochi Prefecture on the Yodo Line, which costs 1159 yen to earn 100 yen.



Next, the section between Anan Station and Kaifu Station on the Muki Line that runs in Tokushima Prefecture is 635 yen, and the section between Mukaibara Station and Iyo-Ozu Station in Ehime Prefecture is 547 yen on the Yosan Line.



Even after announcing the income and expenditure for each section, railway transportation revenue continues to decline.

Last year it was 22.4 billion yen, which is less than two-thirds of the 34.4 billion yen in 1989 30 years ago.



In addition, the new coronavirus is accelerating the deterioration of business performance.

In the interim results for the six months from April to September, rail transportation revenue was 5.3 billion yen, a 55% decrease from the same period last year, and the final profit and loss was 5.3 billion yen, a deficit for the entire group. It has become the largest deficit ever since 2000, when we started to announce the interim financial results of.



Last year, the final profit was 1.2 billion yen due to financial support from the government and expansion of businesses other than railways, and we have secured a surplus for 7 consecutive years, but this year due to the influence of the new coronavirus. As it is difficult to predict, the forecast of profit for one year is "undecided".



[Support] When


JR Shikoku was privatized in 1987, it received financial support of more than 200 billion yen from the government as a "management stability fund" and is using it to cover the deficit generated in the railway business.

In addition, measures are being taken to reduce property tax, light oil take-back tax, and corporate enterprise tax.



Even so, management has been difficult due to the decrease in railway transportation revenue and the renewal of aging facilities, and we have received additional financial support since 2011.



In the 10 years from this year to 2020, we received a total of more than 51.2 billion yen, and also received special bonds issued by the "Railway Construction and Transportation Facility Development Support Organization", an independent administrative agency under the jurisdiction of the Ministry of Land, Infrastructure, Transport and Tourism. We earn 3.5 billion yen annually as interest.



[Improvement measures]


JR Shikoku is increasing the number of tourist trains, including the Anpanman train, in order to increase tourists from outside Shikoku in order to improve management. Last year, 2019 related to tourist trains The income was about 600 million yen.



In addition, in order to raise profits from businesses other than railways, we have been constructing hotels near stations in the prefectural capitals and tourist spots of the four prefectures of Shikoku.



Although it was a valuable source of revenue due to the demand from foreign tourists, the hotel business has been forced into a difficult situation due to the influence of the new coronavirus.

To rationalize operations, we are promoting the unmanned operation of stations with few passengers.



The number of "unmanned stations" has increased by more than 10% over the last 10 years to 194 stations, accounting for three-quarters of all stations.