The Transport Ministry is sounding out local governments invested in the Honshu-Shikoku Bridge Authority about investing for 10 more years, which would use 800 billion yen more in local taxpayer money to keep the loss-making facility afloat, ministry officials said Monday.
The authority operates three bridges and toll roads linking the main islands of Honshu and Shikoku. But the volume of traffic on the toll roads has reached only about 70 percent of estimates, which is too low to even pay the interest on its loans.
The Land, Infrastructure and Transport Ministry’s initial loan-redemption plan for the ailing public corporation envisioned the central government and 10 local governments investing a combined 80 billion yen a year between the current fiscal year to fiscal 2012.
The goal was to have the authority pay off all of its interest-bearing loans using toll road revenues within 50 years of fiscal 1996.
Given the bridge authority’s severe financial situation, however, the ministry is planning to inject the firm with interest-free loans of 80 billion yen a year for 10 years, starting this fiscal year, and to extend the investment period by 10 more years to fiscal 2022, ministry officials said.
Part of that allocation has already been earmarked in the Transport Ministry budget.
Under the new plan, the ministry calculates that the corporation’s repayment obligation would peak at 4.94 trillion yen in fiscal 2011, after which the firm would turn profitable and finish repaying interest-bearing loans within 50 years, the officials said. All invested funds would be repaid in 70 years.
The corporation had received 745 billion yen in investment through fiscal 2000. If the investment period is extended until fiscal 2022, an additional 1.76 trillion yen will be needed, the officials said.
The ministry’s calculation, however, is based on several assumptions. One is that the annual interest on funds raised will be 4 percent. Another is that the traffic volume on the three toll roads will grow by relatively high rates — 1.4 percent each year for the next five years and 3.3 percent every year for 10 years from fiscal 2006.
The Honshu-Shikoku Bridge Authority has been running in the red since it began operations in 1979 and is reportedly saddled with a 3.8 trillion yen capital deficit.
In fiscal 1999, which ended March 31, 2000, it posted operating revenues of 88.5 billion yen, but needed 148.7 billion yen for loan interest payments and 15.7 billion yen for maintenance costs.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.