FACED with a yawning gap in the state budget, the Japanese government is looking to sell off its remaining 39·56% stake in Central Japan Railway during the financial year starting in April.

If the sale goes ahead, it will complete the process of privatising the three JR companies on Honshu: JR East, JR West and JR Central. JR East moved fully into the private sector in 2002, followed by JR West in March 2004. There is no intention to privatise JR Hokkaido, JR Kyushu or JR Shikoku as all three operate regional and rural services that are unlikely to be profitable.

JR Central, in contrast, operates the Tokaido Shinkansen, carrying 132 million passengers between Tokyo and Osaka in the year ended March 2004. This is certainly profitable business, and JR Central’s consolidated results for that financial year showed operating revenue of ´1384bn. A problem inhibiting the full privatisation of JR Central has been the company’s historic debt, but interest payments were reduced in 2003-04, contributing to a net profit of ´72bn (RG 10.04 p677).

The government’s shares in JR Central are held by the Japan Railway Construction, Transport & Technology Agency, a body formed by the merger in October 2003 of Japan Railway Construction Public Corp and the Corporation for Advanced Transport & Technology. Their sale is expected to generate around ´700bn.