A government advisory panel formulating ways to privatize four public road-construction firms will pave the way for them to later invest in highway projects that are deemed profitable, according to a draft report unveiled Tuesday.
The panel will also urge the government and the four firms to immediately consider reinstating any pending projects, including those accounting for about 2,000 km of roads to be built by Japan Highway Public Corp.
The panel plans to submit the interim report to Prime Minister Junichiro Koizumi later in the week. On Friday, the panel hammered out a framework for privatizing the four companies that includes the creation of a public entity to inherit their huge mountains of debt.
Launched in June by Koizumi and chaired by Takashi Imai, honorary chairman of the Japan Business Federation, the panel met Tuesday to discuss the planned report.
At issue are the fates of Japan Highway, Metropolitan Expressway Public Corp., Hanshin Expressway Public Corp. and the Honshu-Shikoku Bridge Authority, and the roughly 40 trillion yen in debt they have amassed. The firms have taken charge of building toll roads with loans from postal insurance and other public funds.
The draft shows that the committee will declare that the current mechanism for building toll roads through public corporations is no longer viable because the firms' inefficient and nontransparent operations have undermined their financial base.
Privatization is aimed at repaying the companies' debts within 50 years or earlier and at a minimum cost to taxpayers. It is also hoped to lead to lower tolls and improved highway services, the panel members agreed.