A decade after the nation's public expressway operators were privatized in October 2005, the interest-bearing debts left behind by Japan Public Highway Corp. and three other entities have been reduced from ¥37.4 trillion to ¥28.75 trillion. However, the plan envisaged in the 2004 law on the privatization — that all expressways would become toll-free by 2050 after all the debts were repaid — has already been pushed back by 15 years due to the flaws in the scheme that failed to take into account the obvious cost of renovating aging infrastructure. Even the new scenario of toll-free expressway networks in 2065 is in doubt because the need to update infrastructure will continue in the years ahead.

The government, which holds all of the shares in the three regional operators created through the breakup of Japan Public Highway — East, Central and West Nippon Expressway, should review the privatization scheme going forward, including the feasibility of the promised end of tolls. The question of whether the operators should be given greater autonomy in management should also be addressed.

The government-funded highway corporation was a target of widespread criticism as the breeding ground for vested interests linked to building and running the expressway networks, with debts mounting from the construction of toll roads with dubious profitability across Japan. Then in the early 2000s the administration of Prime Minister Junichiro Koizumi pushed to privatize Japan Public Highway along with the operators of the metropolitan expressway network in and around Tokyo, the Hanshin expressways around Osaka and those linking Honshu and Shikoku.

Japan Public Highway was broken up into the regional operators. While the expressway facilities and debts were taken over by a separate entity, the operators borrowed the facilities and repaid the debts from toll revenue. Privatization was meant to put a brake on the debt-financed construction of unprofitable roads, repay the accumulated debts within 45 years and end the tolls at that point. This was touted as the key benefit of Koizumi's structural reforms, and the expressway effort served as a precursor for his next goal of privatizing postal services.

However, discussions during the privatization process over how to pay for major renovations of aging expressway facilities in the future were put on the back burner. The issue came to the fore just seven years later, when the December 2012 ceiling collapse at the Sasago Tunnel on the Chuo Expressway in Yamanashi Prefecture killed nine people.

The disaster prompted the expressway operators to come up with plans to replace and repair aging bridges and tunnels, at a total cost of ¥4 trillion. To pay for it, the privatization law was revised to push back the deadline for repaying the debts and making the roads toll-free by 15 years from 2050 to 2065. But the original plan would likely have had to be reviewed no matter what. According to the transport ministry, 19 percent of the expressway sections serviced by the three Japan Public Highway offshoots were at least 40 years old as of the end of March. That ratio will double to 40 percent in 10 years.

This brings into doubt the very feasibility of making the expressways toll-free. It is estimated that renovating aging infrastructure will cost trillions more in the coming decades. If all past debts are repaid by 2065 and the expressways are made toll-free, the cost of major renovations and maintenance after that point will likely need to be covered by taxpayer money. The other option would be to keep charging the tolls. This needs to be addressed as part of discussions on the future shape of expressway networks and their operators.

Privatization of the expressway operators is credited for diversifying and improving the services at shops in the service and parking areas on expressways. The combined annual sales at such establishments has increased by ¥90 billion since the privatization. At the same time, pursuit of business efficiency led to shutdowns of many unprofitable gas stations at service areas, creating 83 expressway sections across the country where motorists need to drive more than 100 km to find the nearest gas station — a problem that needs to be addressed.

The privatization scheme dictates that expressway tolls are set according to debt repayment plans, making it difficult for the operators to make profits out of this revenue by flexibly adapting the rates to local economic conditions and traffic volume. On the other hand, the toll system has been the subject of political intervention in recent years as the government flirted with discounts as an economic stimulus or experimented with toll-free services on some sections.

The Liberal Democratic Party-Komeito alliance in 2009 introduced a government-subsidized program of placing a ¥1,000 cap on tolls for vehicles equipped with electronic toll collection devices on weekends and holidays. The Democratic Party of Japan, whose campaign platform included toll-free expressway services, turned some sections of the network toll-free on an experimental basis after it took power in 2009 — a measure that was terminated when the fiscal needs arose for reconstruction from the 2011 Great East Japan Earthquake and tsunami. But instead of these subsidy-based discounts at the mercy of government policies, reduction of the tolls should be achieved through business efforts and greater efficiency on the part of the operators, and giving the operators more leeway for flexibly setting the rates may be one way of doing that.