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May 04, 2010

Road toll cut stifles Japanese rail revenues

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TOUGH economic conditions and a reduction in road tolls have had a negative impact on the revenues of Japan's three largest railways, which all saw their income decline in the 2009-10 financial year.

JR West was the hardest hit as revenues fell by 6.7% to Yen 1190 billion ($US 12.6 billion), while profits plummeted 54.4% to Yen 24.8 billion. JR Central saw revenues fall 5.3% to Yen 1486 billion with a 27.2% fall in profits to Yen 91.7 billion. JR East revenues dipped 4.6% to Yen 2573 billion and profits declined by 35.8% to Yen 120.2 billion. Other JR companies are also expected to publish poor results.

Despite its commitment to cut carbon emissions, Japan's Democratic Party won last year's national election with a manifesto pledge to reduce expressway tolls by around 30% on weekdays, with a rate of Yen 1000 on weekends and national holidays. The Ministry of Land, Infrastructure, Transport and Tourism is planning to trial toll-free expressways in the near future, and is also considering a Yen 2000 limit on rail fares. 

The JR companies have urged the government to reconsider its policy on road pricing and capping rail fares.
 
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