A government proposal to drastically overhaul government-backed corporations is facing resistance from the ministries and agencies that control them, according to a government report released Friday.

Nobuteru Ishihara, minister in charge of administrative and regulatory reforms, submitted the report to a key government panel headed by Prime Minister Junichiro Koizumi in its meeting Friday morning.

The report outlines reform plans for each government-backed corporation as proposed by the secretariat of the Cabinet’s administrative reform headquarters, as well as arguments against the proposals put forward by the ministries and agencies overseeing them.

Koizumi acknowledged the stiff opposition and urged his ministers to strive to advance the reforms.

“The ministries will most definitely call for (the entities) to continue operations,” he told the morning meeting. “I want Cabinet ministers to exert strong leadership and carry out reforms on the basis that these public corporations should be scrapped or privatized.”

Following the day’s Cabinet meeting, Ishihara told a news conference he hopes to unveil a draft proposal outlining how each of the public corporations should be revamped by the end of September.

As an example of differences cited in Friday’s report, the secretariat proposed that Japan Highway Public Corp.’s highway projects be frozen.

But the Land, Infrastructure and Transport Ministry, which oversees the entity, insists that the projects continue, saying that planned highway construction can be funded if tolls are maintained at current levels.

The secretariat also called for abolishing the provision of public money to the Housing Loan Corp.

But the land ministry said it would be difficult for the entity to provide adequate services if funds are drastically cut, according to the report. The project is part of Koizumi’s plan to review government-backed entities as part of efforts to streamline the nation’s bureaucracy and cut fiscal expenditures provided to the institutions.

Koizumi has said he wants to cut a total of 1 trillion yen in subsidies given to the organizations from the fiscal 2002 budget, which will be compiled around yearend. About 5.3 trillion yen has been allocated to such subsidies in the fiscal 2001 budget.

The secretariat plans to have the quasi-governmental bodies submit financial reports comparable to those of private sector firms by the end of September. It will then compile a final report on the streamlining of the government-affiliated institutions by the end of the year.

Opposition to such plans is expected not only from the ministries but also from lawmakers who serve as lobbyists for the various interest groups connected with the government-supported entities.

Report slams reforms

A Land, Infrastructure and Transport Ministry opinion report released Friday slams reform proposals for state-linked corporations made by the Cabinet Office.

The paper focuses on key bodies such as Japan Highway Public Corp. The secretariat of the Cabinet’s administrative reform headquarters had pointed out that Japan Highway Public Corp., saddled with debts totaling 26 trillion yen, should scale down business by freezing all projects under construction, given a recent slowdown in traffic volume growth. The land ministry, however, insisted that current projections show Japan Highway can repay the debts over 50 years while proceeding with the current plans to construct 9,342-km worth of expressways.

The administrative reform panel also demanded that the ministry review the long-term debt-repayment plans of Japan Highway and three other expressway construction corporations, and disclose all data on traffic volume projections and current financial statuses.

The panel also proposed that the government stop using public money to shoulder a portion of the interest on Housing Loan Corp.’s loans. The entity borrows funds from the state’s fiscal investment and loan program, known as “zaito.”

The ministry argued that the corporation is an important organ as it provides loans to people on relatively low incomes, and instead proposed that the corporation be allowed to accelerate loan repayment schedules to reduce the total amount of interest paid to the zaito program.

In total, Friday’s report included 106 reform ideas for 25 government-backed corporations under the control of the land ministry, the biggest number among all the ministries. The land ministry said it agrees to 67 of them, but clearly or partially opposes 39.

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