Democrats in Japan promised to nationalize toll companies and detoll

The Democrats who just swept to power in Japan in a landslide national election have promised to nationalize toll companies and end tolls by 2012. Since 9,000km, 5600 miles of tollroad in Japan constitutes the great bulk of the country's expressway system this is a most radical proposal. The only "out" in the platform of the Democrat Party of Japan was to retain tolls on "some congested expressways" with the Tokyo metropolitan network cited as an example.

The Democrats said they would finance the end of tolls with issue of some 37 trillion Yen, $400b of central government bonds to buy out the country's major toll companies and state toll corporations. That is their supposed capitalization.

They propose a special "surcharge" on top of existing high gasoline/diesel fuel taxes to service the debt and pay for the free roads.

Reports from Japan say abolition of expressway tolls was a major plank in the campaign of the winning party, which included other big spending measures including huge cash payouts to farmers, and monthly child support payments regardless of income.

But these populist proposals don't seem to have been the basis for the Democrats victory under under Yukio Hatoyama who is the new prime minister. The election seems to have been more a vote to "throw the bums out," the bums in question being the LDP centrists/conservatists who had been in power under progressively weaker leadership for decades.

In despite their populism

The Democrats seem to have won their spectacular vote despite their populist spending plans.

An Asahi Shimbun poll showed 83%  of voters who said they were "Uneasy" about the Democrats spending plans generally.

Public favors tolls

On tolls 67% said their abolition was a bad idea, while 23% supported no tolls, 10% having no opinion, Asahi Shimbun's pollers found.

Another media group poll by Sankei Shimbun/FNN put the numbers at 30.1% of the public supporting free expressways and 65.4% supporting tolls.

LDP played politics with tolls

The former ruling party got up to all kinds of shenanigans with tolls, pooling toll revenues and using the profits of well trafficked tollroads to subsidize non-viable roads, steadily undermining the financial strength of the whole network. There were also corruption scandals. Patronage was notorious.

 In 2005 three giant state owned toll corporations were "privatized" into five heavily regulated regional monopoly companies and four continuing state toll corporations, which doesn't appear to have changed very much.

Major tollers in Japan are the breakup of the old Japan Highway Public Corporation into three regionals, two metropolitan area companies, one major private bridge company and two regional state tollers:

- East Nippon Expressway Company
- Central Nippon Expressway Company
- West Nippon Expressway Company

- Metropolitan Expressway Company in Tokyo area

- Hanshin Expressway Company in Osaka area

- Honshu-Shikoku Bridge Expressway Company

- Nagoya Expressway Public Corporation

- Hiroshima Expressway Public Corporation

- Fukuoka-Kitakyushu Expressway Public Corporation

The LDP government played populist politics with tolls all this year using "stimulus" funds from the national budget to subsidize tolls. There is currently a maximum one day toll of Y1,000 ($10.90) being underwritten by the national government weekends and holidays due to stay into effect until the end of March 2010.

Report in TOLLROADSnews back in Aug 2005:

http://www.tollroadsnews.com/node/1212

TOLLROADSnews 2009-09-023