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Wednesday, March 26, 2003
Road firms eye 20% cut to future building plans
Four road-related public corporations will revise future highway construction plans to shave some 20 percent, or about 4.5 trillion yen, from original budgets, the land ministry said Tuesday.
The four entities are Japan Highway Public Corp., Metropolitan Expressway Public Corp., Hanshin Expressway Public Corp. and the Honshu-Shikoku Bridge Authority.
The cost-cutting measures include reductions in the number of lanes, simplification of interchanges and improved construction methods, according to the ministry.
The firms also hope to save 500 billion yen by adopting new bidding and contracting methods, ministry officials added.
The semigovernmental firms, criticized for snowballing debts and exorbitant construction costs, have also promised to cut management expenditures by 210 billion yen -- roughly 24.5 percent of their total figure for fiscal 2002 -- by fiscal 2005, when the four are expected to be privatized, the Land, Infrastructure and Transport Ministry said.
The reduction in management costs will include 10.4 billion yen to be saved by cutting 722 jobs by fiscal 2005.
The entities currently have a combined workforce of 11,400.
The four corporations have also promised to stop having affiliate firms hire their retired executives and will request that presidents of affiliates who used to be officials with them step down.
However, the four firms will have to gain the understanding and cooperation of local residents and related government bodies when they review their existing construction plans, and the extent to which they will be able to achieve the targets is yet to be seen, some observers say.
For example, Japan Highway said it would have to secure the agreement of parties involved for some 1.57 trillion yen of its total 3.79 trillion yen in planned cuts.
Tuesday's announcement came in response to calls by a seven-member advisory panel under Prime Minister Junichiro Koizumi, which in December submitted a final report recommending drastic privatization measures for the four public corporations.