The Diet passed a bill Friday to revise the Japan Railway law to fully privatize three JR group railroads operating in Honshu.
The bill, which had already cleared the House of Representatives, was approved at a plenary session of the House of Councilors.
The three firms are East Japan Railway Co., West Japan Railway Co. and Central Japan Railway Co. (JR Tokai).
Under the amendments, the three carriers will be allowed to choose their presidents and issue corporate bonds without government permission.
However, the legislation allows the transport minister for the time being to issue instructions and recommendations over the maintenance of unprofitable local lines.
The government plans to begin selling its large remaining shareholdings in the three railways as early as this fall, government officials said.
In February, the Land, Infrastructure and Transport Ministry and the three firms agreed to hand their entire ownership over to private shareholders by unloading government stakes.
The accord became possible after JR Tokai dropped its objections to the government’s proposal of full privatization. The ministry said it would consider the carrier’s demand for measures to ease debt it incurred in 1991 when JR Tokai purchased the Tokaido Shinkansen Line from Shinkansen Property Corp.
In 1987, the money-losing Japanese National Railways was split up into JR firms and partially privatized.
Welcoming the enactment of the revision, JR West President Shojiro Nanya urged the government to quickly sell its stake in his company.
“(The law revision) marks a significant step forward toward completing reform of the JNR. We would urge the government to sell all of its shares in our company as soon as possible to realize the full privatization,” he said in a statement.
Speaking at a news conference Friday, however, Chikage Ogi, minister of land, infrastructure and transport, said she could not specify how soon the government will release its shareholdings in JR companies.
She made the remark in response to a media report that the government is poised to sell its holdings in JR West and JR East by the end of February.
Ogi said her ministry is not considering selling its JR shares at present, noting that a decision on the timing will be made after the potential impact on the stock market and the nation’s overall economy has been studied.
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