October 5, 2016
Japanese Communist Party lawmaker Motomura Nobuko on October 4 at a Lower House Budget Committee meeting urged the government to revoke its approval for the cost-ineffective project of the Linear Chuo Shinkansen.
It is said that the maglev train project will be in the red due to its enormous construction costs and an anticipated decline in the Japanese population. In September 2013, Central Japan Railway Company (JR Central) President Yamada Yoshiomi, the person responsible for the project, declared at a news conference, “This business venture will never pay.”
The Abe administration plans to loan JR Central a total of three trillion yen from fiscal 2016 to 2017 using the Fiscal Investment and Loan Program (FILP). The railway company is supposed to pay the government 300 billion yen each year over a decade from fiscal 2046.
Motomura said, “Is it allowed to utilize the FILP to loan funds to a business which is destined to be in the red?” She went on to ask whether the Fiscal System Council, an advisory body to the Finance Minister, carefully assessed the firm’s ability to repay the massive loans.
Finance Minister Aso Taro replied that ministry officials explained the loan program to each council member instead of convening the panel, admitting that the advisory panel failed to discuss the program.
Motomura pointed to the possibility that the construction costs may further increase. Aso said in response, “I don’t know how much it will cost in total because I will be dead before its completion.” Motomura condemned the minister’s remarks as “totally irresponsible”.
The JCP parliamentarian also pointed out that the government originally approved the maglev train project on the assumption that JR Central will cover all the costs on its own. “This assumption has broken down with the government decision to use public funds. The government should revoke its approval for the project without delay,” she stressed.
Past related article:
> Additional economic stimulus measures highlight Abenomics’ failure [August 2, 2016]
It is said that the maglev train project will be in the red due to its enormous construction costs and an anticipated decline in the Japanese population. In September 2013, Central Japan Railway Company (JR Central) President Yamada Yoshiomi, the person responsible for the project, declared at a news conference, “This business venture will never pay.”
The Abe administration plans to loan JR Central a total of three trillion yen from fiscal 2016 to 2017 using the Fiscal Investment and Loan Program (FILP). The railway company is supposed to pay the government 300 billion yen each year over a decade from fiscal 2046.
Motomura said, “Is it allowed to utilize the FILP to loan funds to a business which is destined to be in the red?” She went on to ask whether the Fiscal System Council, an advisory body to the Finance Minister, carefully assessed the firm’s ability to repay the massive loans.
Finance Minister Aso Taro replied that ministry officials explained the loan program to each council member instead of convening the panel, admitting that the advisory panel failed to discuss the program.
Motomura pointed to the possibility that the construction costs may further increase. Aso said in response, “I don’t know how much it will cost in total because I will be dead before its completion.” Motomura condemned the minister’s remarks as “totally irresponsible”.
The JCP parliamentarian also pointed out that the government originally approved the maglev train project on the assumption that JR Central will cover all the costs on its own. “This assumption has broken down with the government decision to use public funds. The government should revoke its approval for the project without delay,” she stressed.
Past related article:
> Additional economic stimulus measures highlight Abenomics’ failure [August 2, 2016]
