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Wednesday, July 23, 2003

POLL ON UNPROFITABLE EXPRESSWAYS

Don't build it unless they'll come


Staff writer

More than three-quarters of respondents to a recent survey believe the government should stop building expressways if the projects are not expected to turn a profit.

The results of the survey, conducted by an advisory panel to Prime Minister Junichiro Koizumi, were released Tuesday.

Koizumi asked the panel to draw up privatization plans for four debt-ridden semigovernmental firms: Japan Highway Public Corp., Metropolitan Expressway Public Corp., Hanshin Expressway Public Corp. and Honshu-Shikoku Bridge Authority.

Of the 2,048 respondents, 50 percent said current expressway tolls are "expensive," while 25.1 percent felt they were "relatively expensive."

Some 76.8 percent of the respondents said the government should stop building new expressways whose operations are expected to remain unprofitable, while 11.8 percent said the government should continue pouring taxpayer money into projects despite uncertainties over profitability.

The panel is trying to figure out how to prioritize a number of pending expressway construction projects.

Panelists hope the survey results will help slow the construction of new expressways, which are often criticized as being nothing more than pork-barrel projects.

Most of the currently planned expressways, which are either in rural areas with small traffic demands or in the heart of urban areas where construction costs are extremely high, are expected to be unprofitable.

Nevertheless, many ruling lawmakers have argued that more public funds should be spent on building expressways to reinvigorate rural areas suffering from declining populations.

The panel compiled a final report in 2002 recommending that priority be given to the repayment of the four firms' growing debts, worth a total of 40 trillion yen, instead of throwing more money at unprofitable road projects.

Two of the panel's seven original members opposed the final report, choosing to boycott panel sessions in protest.

During Tuesday's session, the remaining five members, including writer Naoki Inose and East Japan Railway Co. Chairman Masatake Matsuda, renewed their call on Japan Highway President Haruho Fujii to resign.

Fujii has been criticized for allegedly hiding a balance sheet that shows Japan Highway's total liabilities far exceed its assets. Fujii has denied that such a balance sheet has been officially compiled.

Verification pending

The government will verify by the end of August whether Japan Highway Public Corp.'s financial statements that its assets eclipsed its debts by 5.76 trillion yen as of March 31 are true, the transport minister said Tuesday.

"Whether or not the financial statements are credible will be clarified by the end of August," Chikage Ogi, minister of land, infrastructure and transport, said at a news conference.

"An auditing firm to be in charge (of the verification process) will be selected through a tender from among the nation's four major accounting firms" by the end of July, Ogi said.

Her remarks come as the financial statements, released June 9, are under Diet scrutiny due to a senior corporation official's accusation that Japan Highway hid other statements showing the government-run entity actually has a negative net worth of 617.5 billion yen.

In a recent magazine article, Sachio Katagiri, deputy head of the public corporation's Shikoku branch, accused Japan Highway President Haruho Fujii of deciding against releasing those financial statements.

"It remains unknown whether the accusation is accurate," Ogi said, "because there are no relevant documents."

But she said Fujii is responsible for the internal discord in view of the fact that the whistle-blower publicly stepped forward with the accusation.

The accounting firm to be selected will be asked to examine the official financial statements of June 9 to determine whether they were compiled in accordance with the accounting norms specified by a Japan Highway task force that included outside experts.

Waseda University professor Yoshihito Kako headed the task force.

The task force's accounting norms have drawn public criticism as they mandated that Japan Highway spread out the duration of the fiscal years during which depreciation costs for soil used to raise the ground levels beneath highways can be booked to 70 years from the 40 years usually used in accounting practices for roads.

So even if an accounting firm recognizes the official financial statements as accurate, due to the norms the ministry specified, critics may continue to question their accuracy.



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The Japan Times

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