A showdown looms between advocates of reform and vested interests.
Political attention is currently focused on a key panel discussing the future of toll expressways, with its members due to hammer out before the end of the month a framework to privatize Japan Highway Public Corp. and three other debt-strapped public expressway firms.
The seven-member panel, which operates under Prime Minister Junichiro Koizumi, has warned that the four firms are on a fast track to doom, saddled with debts totaling 40 trillion yen and snowballing and unprofitable toll expressway projects destined to fail.
Industry experts claim the lack of autonomy experienced by these semigovernmental entities has resulted in inflated construction costs and projects dictated by political pressure.
Under a scheme that has been agreed to by the panel, an independent public body to repay all the debts of the four public firms would be established.
The four firms would be privatized and then transformed into several corporations that would separately manage the highway operations.
At issue is whether the new private entities will be driven by market forces and independent from the control of bureaucrats and politicians.
Such control has been a long-standing problem for Japan Highway, which fought behind the scenes with the former Construction Ministry in an effort to achieve more independence.
Former Japan Highway officials claim one symbolic case involves the Second Tomei-Meishin Expressway, which is to link Tokyo and Kobe under an original construction plan approved in 1987.
With the project expected to cost well above 10 trillion yen, it is not expected to generate any profit, they say.
“To complete the Second Tomei-Meishin, it would cost 10 trillion yen or 20 trillion yen. I believe this project should be canceled,” said Masatake Matsuda, a road panel member and chairman of East Japan Railway Co.
Around 63 percent of the sections that have been authorized to date — lying between Kobe and Ebina in Kanagawa Prefecture — would be either tunnels or bridges aimed at making the expressway as straight as possible.
The expressway, which would have three lanes in each direction, is designed to allow vehicles to travel up to 140 kph, an unprecedented speed.
The estimated per-kilometer construction cost for the turnpike has jumped to 23.6 billion yen, about five times higher than that of an average expressway.
A former high-ranking Japan Highway official said cost concerns had fueled internal opposition over the expressway’s design.
“Japan Highway was very much concerned, since the high costs could endanger its foundation,” the official said on condition of anonymity. “It also doubted whether such high specifications were really necessary.”
While serving as a senior official within the construction ministry, however, current Japan Highway President Haruho Fujii pressed for the extravagant design despite Japan Highway’s protests.
“Fujii, who is also an engineer, wanted to build the expressway with the latest technology and specifications,” the official said.
With Japan Highway possessing no authority in deciding national expressway network routes, it has allowed politicians to draw up construction plans that are too ambitious, according to industry experts.
In this regard, the Ebina-Tokyo section of the Second Tomei-Meishin Expressway — the most critical section in terms of easing congestion and generating traffic demand for the new toll road — is currently at stake.
Despite having been approved by the National Development Arterial Expressway Construction Conference, which consists of Diet members and experts, construction of the Ebina-Tokyo section has been stalled due to difficulties in procuring land in densely populated areas, according to land ministry officials.
Many industry officials agree that Japan’s unprofitable toll expressway projects came about as a result of pressure from influential politicians, notably the Aqualine expressway linking Chiba and Kawasaki and the Honshu-Shikoku bridges.
While the Land, Infrastructure and Transport Ministry often bows to pressure from pork-barrel politicians trying to launch expressway projects in their home districts, semipublic entities such as Japan Highway are reluctant to reduce costs because their projects are subsidized by the government’s “zaito” loans.
In any event, no one wants to step forward and take responsibility for unprofitable public projects.
A former Japan Highway employee who worked at a key planning section of Japan Highway admitted that workers pay little heed to cost-reduction concerns, partly because there is no motivation for the company to save money.
“Japan Highway just follows the government’s orders in constructing expressways,” the former worker said on condition of anonymity. “(Profitability and cost-cutting) are actually not our business.”
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