FOCUS: Talks Inevitable on Struggling Regional Railways in Japan

Economy

Tokyo, Nov. 29 (Jiji Press)--With Japanese railway operators facing tough business conditions due to population declines and the COVID-19 pandemic, talks on what to do with unprofitable regional lines across the country are becoming inevitable.

Whether the operators and others can present visions for the future from the perspective of users will be key to the success of such talks, as many people living near loss-making train lines are strongly concerned about their possible scrapping, pundits say.

In early October, East Japan Railway Co. <9020>, or JR East, resumed full operations of its Tadami Line, which links Niigata and Fukushima prefectures, with a section that had been closed due to heavy damage from torrential rains in 2011 brought back online.

The line avoided closure thanks to the adoption of a scheme in which local governments own and manage facilities such as railway tracks while railway firms operate train services.

Under the split-management system, railway operators can avoid booking depreciation and other costs, and may see their earnings improve if local governments reduce fees for their use of the infrastructure or exempt them from the payments.

[Copyright The Jiji Press, Ltd.]

Jiji Press