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Japan fails at the rails and pays dearly for it

WHEN Japanese businessman Masao Kamei agreed to head a new government-appointed committee, his wife reportedly told him he was ''foolish'' and refused to speak to him for a week.

As chairman of Sumitomo Electric Industries, he heads a committee established by Prime Minister Yasuhiro Nakasone to oversee rehabilitation of the deficit-ridden Japan National Railways (JNR) - a task Mr. Kamei's wife considers both thankless and difficult.

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Her husband does not disagree. As observers elsewhere can testify, the economics of public transportation can be as stubborn as a jammed switch - and politics can derail even the sleekest recovery program.

''It will take 20 to 30 years to complete JNR's rehabilitation,'' Mr. Kamei told reporters recently.

Japan National Railways, in fact, is a paradox.

JNR's trains run on time, moving millions of travelers around the country daily with clockwork efficiency. Railway executives and engineers from around the world come to admire and buy the technology that created the famous high-speed ''bullet trains.'' JNR's technological virtuosity is putting the finishing touches on the world's longest tunnel.

At the same time, the rail network epitomizes for many Japanese the profligate spending and financial irresponsibility of public corporations that do not have to worry about going bankrupt.

In fiscal 1982, JNR had a record loss of $5.9 billion. Fiscal 1983 could be worse. The network has a cumulative deficit of $77 billion and has to keep borrowing more to pay off its debts. Interest payments alone account for almost 38 percent of total operating revenues.

How did it get into such a state? Critics often cite overstaffing and poor management. But in broader terms, JNR, like public transport systems in other countries, has found it hard to reconcile the need of citizens for reliable, affordable transportation with the need to operate within reasonable financial constraints.

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An often-cited example is the Msall Line between the central Alps towns of Karuizawa and Komoro, which formerly had only seven trains in each direction per day. Students going to high schools in the area often had to wait up to four hours if they missed a train - time some of them spent hanging around games arcades and engaging in delinquent behavior. Traffic accidents soared as many students commuted by motorcycle instead.

For two years teachers and parents campaigned for more trains. Three were finally added in each direction - meeting a real social need, while doing nothing to ease JNR's financial problems. But, say those opposed to running JNR along strictly profitmaking lines, the Msall case shows exactly why a state-owned transportation system is needed.

Parts of the JNR network are obviously successful. Commuter services in Tokyo and Osaka made a $692 million profit last year, while the original ''bullet train'' line to Osaka and major cities en route to the southern island of Kyushu came out ahead by just over $2 billion.

But these successes were more than offset by losses on local lines and by the failure of the freight division to meet the challenge from coastal shipping and long-distance trucks. Critics note that many of the unprofitable lines were built under pressure from politicians seeking to impress their constituents. These same political pressures keep the trains running - despite a decline in rural populations and the growing use of automobiles.

Early in 1983, after two years of study, a government-appointed advisory group of business leaders proposed drastic solutions for JNR's problems. It said all debts should be eliminated at the stroke of a pen - and that the network should then be broken up into regional divisions as a first step toward an eventual private takeover.

These proposals are among the options being considered by the Rehabilitation Surveillance Committee Mr. Kamei heads. The task, however, is complicated by a divergence of opinions on what is wrong with JNR and on what can be done to overcome its problems. Most agree that the network should be as concerned about costs as any private company - and only make investments that have a strong probability of profitable return. But beyond that there is ample scope for controversy.

The surveillance committee has proposed, for example, the adoption of a flexible fare structure. On lossmaking local lines, it suggests, fares should be raised. But in those cities where JNR competes head-on with private lines - whose fares are about half those of the national railway - fares should be frozen.

JNR, in fact, already plans to scrap 73 of the most unprofitable local lines. But the committee wants to see 102 more dropped. It would like to have them taken over by the private sector alone or by joint ventures between private companies and local governments.

But such cuts immediately raise questions of public interest. Makoto Morikage , chairman of JNR's largest union, argues that the proposals for a different fare structure, as well as the scrapping of local lines and freight services, would ''deal a heavy blow to the development and culture of local communities'' - encouraging further population concentration in urban areas that are already congested and highly polluted.

While such questions are being debated, JNR is hoping to take the pressure off by cutting its costs and generating more revenue with the following measures: a freeze on hiring and a program of voluntary resignations and early retirements, which has cut the staff from in 1980 to about 340,000 today; promotion campaigns to encourage more use; diversification into new areas, such as telecommunications services (using the nationwide railway-telephone network); and redeveloping railway stations into office buildings, hotels, and department stores, emulating the profitable private railways.

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