Founded on a ¥387.7bn endowment instead of a profitable railway (1987)

Nobody specified what the reprieve was for

What Kyushu Railway received in 1987 was not a subsidy to erase the railway’s deficit. Where the three Honshu companies took on JNR’s long-term debt, the island companies inherited none of it and were given instead a management stabilisation fund whose investment income would cover the operating loss and nothing more. Kyushu’s $2.7B (¥388bn) was about a third of its total assets; invested at the assumed 7.3%, the roughly $207.5M (¥30bn) a year it would yield faced the roughly $207.5M (¥30bn) railway operating loss expected at founding. The amount to be lost and the amount to be generated were balanced from the start.

What the design actually handed over was time — the ability to go on losing money without collapsing — and nothing specified what the time was for. Treat the investment income as the finished form of earnings and both fixing the railway and diversifying can be deferred indefinitely. Ishii Yoshitaka, the first president, drew the opposite line: the fund’s income was a premise, not a destination. From July 1987, the founding year, he opened a domestic travel business, and went on to line the company up outside the railway in leasing, resort development and high-speed ferries. Hokkaido’s $5.6B (¥682bn) and Shikoku’s $1.7B (¥208bn) still sit untouched as funds, while Kyushu spent its own down over twenty-nine years and went to market. The gap between the three companies shows that the same reprieve could serve either as a reason not to move or as the capital with which to move.