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JNR Submits Plan For Private Management

January 11, 1985

TOKYO (AP) _ Japanese National Railways, the government-owned rail system that has been running in the red for 20 years, has proposed turning itself into a unified, privately managed corporation that will generate a profit by 1990, JNR spokesman Mitsumi Nakaune said Friday.

But the plan brought quick criticism from others involved with JNR’s rehabilitation, who said it lacked fundamental solutions for the system’s financial troubles.

JNR registered a record annual loss in fiscal 1983 of $6.64 billion, brining its accumulated debt to $79.92 billion.

Nakaune said that under the plan, submitted to the government Thursday, JNR would continue to be government-financed while management would be switched to the private sector beginning April 1, 1987.

He said the corporation would remain in one piece, rather than split into local companies. The exceptions woud be two of the unprofitable systems - in Hokkaido, Japan’s northernmost main island, and the southwestern island of Shikoku - that would be left to local management.

The 13,125 miles of rail controlled by JNR would be reduced to 7,500 miles, Nakaune said, adding that 85 local lines would be replaced by buses, 70 local lines would be run by JNR subsidiaries and 20 lines would come directly under JNR management. The profitable high-speed Shinkansen, or ″bullet train″ lines, would not be affected.

Soon after the report was submitted to the JNR Reform Commission, the chairman of the commission, Masao Kamei, criticized it, saying the plan contained no fundamental suggestions for reform. The commission, established under the prime minister’s office in June 1983, will submit its own plan to the prime minister this summer.

The Japanese media has reported that the commission will recommend dividing the corporation into eight or more separate bodies under private management.

01-11-85 1327EST

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