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The transport ministry may give tax relief to Central Japan Railway Co. (JR Tokai) in an attempt to reduce the financial burden stemming from the carrier’s repairs to the Tokaido Shinkansen Line, ministry officials said Wednesday.

The favorable tax treatment would be offered in the form of a reserve fund for repair and maintenance work on the bullet train line, annual contributions to which would be treated as losses to help JR Tokai save on corporate tax payments, the officials from the Land, Infrastructure and Transport Ministry said.

The ministry and JR Tokai are putting the final touches to the proposed fund — working out details such as its scale and whether to make bullet train repair costs subject to the fund — while calculating how much money will be required for repair work, they said.

The ministry expects the tax measure to be allowed under tax reforms for the next fiscal year, they said.

The ministry is considering allowing East Japan Railway Co. and West Japan Railway Co. to set up similar funds to finance repairs on the Tohoku, Joetsu and Sanyo Shinkansen lines if they are unable to finance such work on their own, the officials said.

The Tokaido Shinkansen Line, which connects Tokyo and Osaka, has been in continuous operation since its debut in 1964. JR Tokai needs to conduct large-scale repairs on related facilities before 2017.

Saddled with about 4.7 trillion yen in long-term debts, JR Tokai has asked for favorable tax treatment so it can repay debts in preparation for full privatization.

Faced with difficulties in raising funds for repair work on the Tokaido Shinkansen Line while servicing its massive debt, JR Tokai has asked the ministry to provide tax relief over debt repayment.

JR Tokai is one of the seven privatized entities of the old Japanese National Railways. Though privatized in 1987, JR Tokai is still partly state-owned.

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