The Transport Ministry said August 27 that it will request 690 billion yen worth of repayment for government bonds be transferred in fiscal 1998 from the government’s general account to one for coping with the massive debts now held by JNR Settlement Corp.
The plan is contained in the ministry’s budget request, which will be sent to the Finance Ministry by the end of the week. To pay off the debts within 50 years, the ministry plans to similarly transfer 1.4 trillion yen worth of repayment for government bonds to the proposed special account every fiscal year starting in fiscal 1999. The ministry will also ask for 40.1 billion yen from the government’s general accounts budget to subsidize the governmental corporation, and 2.2 trillion yen from the Fiscal Investment and Loan Program, which is funded by postal savings and public pension funds, to repay part of the debts.
The Finance Ministry criticized the Transport Ministry’s plan, saying that it will eventually lead to deficit-covering bonds being floated.
JNR Settlement inherited the debts — which are anticipated to reach 27.8 trillion yen by the start of fiscal 1998 — from the now-defunct Japanese National Railways after it was privatized and separated into seven group companies in 1987. Under the proposed 50-year program, the Transport Ministry plans to transfer the debts from JNR Settlement Corp. to the planned special account. Of the debts, 16 trillion yen accrues interest and 3.5 trillion yen is used to cover the pensions of former JNR employees.