West Japan Railway Co. decided Wednesday not to sue the national government over its decision to impose an additional burden on the firm related to the mounting debt left behind by the former Japanese National Railways.
JR West’s decision puts an end to the prolonged dispute between the seven JR group firms and the government, which has asked each of them to put up new contributions to help dispose of JNR debt that has grown to 28 million yen.
The national government and each JR firm had agreed to divide JNR’s debt when the national railways were privatized in 1987, but the government has made little headway in disposing of its share, especially amid the sharp plunge in real estate prices since the early 1990s.
JR West President Shojiro Nanya reached the decision during a meeting with Transport Minister Jiro Kawasaki, who offered reassurances that the government will not impose further burdens on JR firms, Nanya said.
“The minister said it is the will of the prime minister and the whole Cabinet not to impose further burdens on JR firms, and I took it very seriously,” Nanya said. “I believe that we can obtain understanding among our shareholders on the decision (not to sue the government).”
The government continues to hold roughly one-third of the shares in JR West, JR East and JR Tokai and 100 percent of the shares in the other four railways.
Under a law enacted in October, the seven firms are required to pay 180 billion yen to make up for a shortage in pension funds for former JNR employees.
The JR firms originally said it was irrational for the government to unilaterally impose the burden on them, since they had already assumed their due share of the debt.
Some of the companies had indicated that they would take the government to court.
But one by one the JR firms fell in line and made their newly required payments; JR West made a 44.5 billion yen last month.
“I still think (the law) is unconstitutional,” Nanya said. “But it is a fact that the Japanese judicial system favors the government. If we sue, it would be a difficult battle. It is a better choice not to sue.”