Government-proposed legislation to postpone by 15 years the time when the nation’s expressways become toll-free has come to underline the flaws in the 2005 scheme that privatized Japan Public Highway Corp. and other expressway operators. The government needs to fully explain why the toll-free target year is now being pushed back just nine years after privatization — and whether the idea of making expressways toll-free at any point in the future is feasible.
Under the privatization scheme, expressway operators were to repay roughly ¥40 trillion in debts incurred by past expressway construction within 45 years, then make all of the nation’s expressways toll-free. But the latest bill pushes back the deadline for eliminating tolls from 2050 to 2065 — because of the need to borrow more to repair and renovate aging bridges and tunnels.
A December 2012 ceiling collapse inside the Sasago Tunnel on the Chuo Expressway in Yamanashi Prefecture, which killed nine people, highlighted the urgency in renovating those aging expressway infrastructures. Such obvious needs should have been foreseen when the expressway operators were privatized. But the privatization scheme required the operators to use much of their toll revenue (minus routine operational expenses) to repay past debts without a mechanism to set aside renovation funds.
More than 50 years have passed since the first metropolitan expressway routes in Tokyo and environs were built in time for the capital to host the 1964 Summer Olympic Games. Ten years from now, roughly 30 percent of the metropolitan expressways will have become more than a half-century old. Massive repair-and-renewal projects for these infrastructures are urgently needed.
Last month, East Nippon Expressway, Central Nippon Expressway and West Nippon Expressway estimated that the cost of renovating their aging bridges and tunnels over 15 years, starting in fiscal 2014, would reach ¥3.02 trillion.
Operators of the metropolitan expressways, the Hanshin expressways serving the areas around Osaka, and the expressways linking Honshu and Shikoku separately plan to spend a total of ¥1 trillion-plus for renovations of infrastructure. The legislation will enable the operators to keep charging expressway tolls 15 years longer than originally scheduled.
It is obvious that such work will not end in 15 years. More aging bridges, tunnels and roads will be identified as in need of renovation. Expressway operators say additional trillions of yen will be required for further renovations in coming decades. Neither the privatization scheme nor the latest legislation to amend it addresses the question of who is going to pay these future expenses.
The 2005 privatization — one of the key reform measures introduced by the administration of then Prime Minister Junichiro Koizumi — emphasized halts in the construction of inefficient roads under the government-funded expressway operators. But it overlooked the costs of renovating aging infrastructure.
The government needs to give a clear picture of how these expenses will be covered. The privatized expressway operators, for their part, are urged to minimize expenses and the burden of expressway users through greater operating efficiency and better cost management.
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