Administrative vice ministers drafted a bill to revise the Japan Railway law at a meeting Monday, paving the way for full privatization of three JR group companies, government officials said.

The bill will be submitted to the Diet after attaining Cabinet approval today.

The three companies are East Japan Railway Co., West Japan Railway Co. and Central Japan Railway Co. (JR Tokai).

The revision will be implemented within six months of the bill's enactment, and the government plans to begin selling its large remaining shareholdings in the three this fall, though that will depend on stock market conditions.

Under the amendments, the three firms will be allowed to choose their presidents and issue corporate bonds without government permission. The legislation will require them to cooperate in maintaining unprofitable local lines for an undefined period of time and in deciding fees.

On Feb. 21, the Land, Infrastructure and Transport Ministry and the three firms agreed that the government will unload its stakes.

The accord became possible after JR Tokai dropped its objections to the government's proposal of full JR privatization. The ministry said it will consider the operator's demand for measures to soften debt it incurred in 1991 when JR Tokai purchased Shinkansen bullet trains from the state.

In 1987, the money-losing Japanese National Railways was split up into several JR firms, and some shares were sold to the private sector.

JNR had incurred more than 37 trillion yen in interest-bearing debt under the state's administration.

The government divided the debt and had each JR firm agree to repay part.

Telecom law debate

The government will not change a proposed bill that will tighten regulations on Nippon Telegraph and Telephone Corp., despite opposition in the ruling Liberal Democratic Party, a senior telecommunications ministry official said Monday.

Opposition to the bill "should be taken as a call for proper amendment (of the Telecommunications Business Law), rather than opposition to the legal revision," Akira Shimazu, vice minister of the Public Management, Home Affairs, Posts and Telecommunications Ministry, said at a press conference.

The proposed legislation to amend the telecom law would empower the government to apply harsher regulations on core companies in the dominant NTT group of carriers to allow other carriers to compete more efficiently with the telecom giant.

Submission of the bill to the Diet has been blocked by some LDP power brokers.

With regard to the possible use of postal savings to purchase domestic stocks to prop up their prices as proposed in the tripartite ruling coalition's latest package of emergency economic measures, Shimazu voiced opposition to the proposal on the grounds that safety should be given priority in the management of public funds.