Railways in Japan date back to 1872. It was in that year that the Meiji government decided to establish a transport sector. The aim at the time was to replicate a railway system similar to those found in the West. The lack of public funds meant that this task was entrusted to the private sector, and these foundations became the backbone of Japan’s railway network.
1906 however saw a change in events with the enactment of the law on nationalisation which brought 17 private railway companies under the umbrella of the Imperial entity called the “Imperial Government Railways”. This nationalisation however was not exhaustive. Around twenty private companies were left to continue operating on their often small networks (one hundred Kms at most) which had very little traffic, since they were deemed unviable or simply of no strategic importance. These companies which were never nationalised not only survived but went on (after consolidation and mergers) to become large national scale entities for which railway business became a minority 40% of their overall turnover.
In the case of the other companies nationalised in 1906, the railway boom which lasted until 1945 helped the JNR group (Japan National railways) prosper. The advent of the motorcar and subsequent fall in modal share meant however that by 1964 the group was experiencing losses of 30 billion Yen, which ballooned into 1361 billion Yen in 1986. This unsustainable situation prompted the government to take radical action and JNR was privatised in 1987, splitting the group into regional railway companies. Out of this action came: JR East (operating in the Tokyo area and eastern part of the Honshu Island network, including the Tokyo-Niigata Shinkansen line, the Joetsu Shinkansen and the Tokyo-Morioka-Tohoku Shinkansen); JR West (operating in Osaka and across the western part of the Honshu Island network including Kobe, Kyoto and the Sanyo Shinkansen line between Osaka and Fukuoka, plus a small part of the network on the Island of Kyushu); JR Central (covering the central part of the Island of Honshu, Nagoya, as well as part of the Tokaido Shinkansen line (the largest line in terms of passenger volume) which runs between Tokyo and Osaka and accounts for 85% of the company’s revenue); JR HOKKAIDO, JR SHIKOKU, JR KYUSHU (each of these three companies operating on the eponymous island); and finally JR Freight, which is the sole company for transport of goods following the breakup of JNR for the whole of Japan. This split was the most notable part of privatisation.