December 6, 2002
1. Modality of new organizations
(1) In order to adjust profits among new companies and achieve as soon as possible settlement of long-term debt, the Government will establish the "Holdings and Debt Repayment Organization" (Provisional name, hereinafter referred to as "the Organization"). The Organization inherit in a lump the road assets of the four highway-related public corporations (excluding the assets that will be inherited by new companies) and the long-term debt corresponding to them. The new companies will borrow road assets from the Organization and will pay rental fees.
(2) New companies
(3) Holdings and Debt Repayment Organization
(4) Debt disposal of Honshu-Shikoku Bridge Authority
Through utilization of toll receipts, state funding, local government funding (extended by another 15 years from the present period), and road tolls of other highway-related public corporations, and the separation of debt (national government earmarked road revenues), the Government will push forward a significant reduction (by approximately half) of the Honshu-Shikoku Bridge tolls alongside the disposal of debt through separation.
(5) Separation into regions
In order to secure an appropriate organizational scale, and foster cost and profitability awareness through competition, the Government will divide the country into five regions and establish the new companies there. Concerning the Metropolitan Expressway Public Corporation and the Hanshin Expressway Public Corporation, the new companies will be established with existing routes as their core infrastructure.
The new companies will take flexible measures to reduce tolls in line with the current conditions as a tangible result of the privatization, and will implement an average 10% reduction of tolls upon privatization.
3. Future road construction
(1) During the period until the establishment of the new companies, each corporation will carry out selective budget allocations based on the order of priority of individual routes in line with standards determined by this Committee.
(2) The new companies will, based on their financial conditions and profitability of investments, and with due consideration to the public interest, independently determine participation in new construction.
(3) To handle investments for construction that are unprofitable for new companies, the Government will establish a new system based on sharing of cost burden with central and local governments under the formula of joint implementation.
(4) The new companies will independently procure the fund for capital investments including road construction, and the Government will establish measures to provide guarantee facilities, etc., only until the companies list their stocks on the stock market. However, with a view to maintaining market discipline, the Government will not acknowledge utilization of government investment and loan fund.
4. Reform of related public service corporations and their family enterprises and reduction of maintenance costs
The Government and the four road-related public corporations will work toward transfer of road service facilities owned by related public service corporations to new companies and will actively develop related business through the new companies' subsidiaries. They will also aim at a sweeping reduction of maintenance costs (30% overall) through dismantling of the unfair structure of collusion with family enterprises, securing of competition in the bidding at subcontracting business, and abolishment of the requirements for bid participation in the maintenance and repair work business (during FY2002).
5. Schedule of reforms
(1) The Government and the four road-related public corporations will steadily implement revision of the current construction plans, recruitment of experts from the private sectors, creation of a cost-cutting plan (within FY2002) and other measures that must be urgently implemented prior to launching the privatization of the corporations.
(2) The Government will implement the privatization of the four highway-related public corporations on April 1, 2005.