TOKYO, Nov 23: Japanese Prime Minister Junichiro Koizumi’s much-touted drive for reform remained in doubt Friday, a day after he brokered an accord on the future of loss-making government corporations.

Politicians and bureaucrats, backed by special-interest lobbies, are still seen poised to spoil the agreement to dismantle or privatize seven state-supported corporations.

There still remain many other special (public) corporations which tend to be lax with their deficits and charge the check to the public, the leading business daily Nihon Keizai Shimbun said in an editorial.

The grip on reforms of special corporations shall not be let up, it added.

The firms included four corporations charged with building highways nationwide, including the Tokyo and Osaka metropolitan areas, as well as bridges between the main islands of Honshu and Shikoku.

Of them, Japan Highway Public Corporation is saddled with debts totaling $210 billion after continuing to build highways regardless of their profitability.

It has reportedly accommodated more than 400 former bureaucrats and been seen as an example of pork-barrel politics and a hindrance to free competition.

Koizumi, who has helped restore the public’s trust in his Liberal Democratic Party (LDP) since taking office last April with a promise of reform, reached the agreement late Thursday with Komeito party leader Takenori Kanzaki and New Conservative Party head Takeshi Noda.

The accord was generally hailed as a “breakthrough” by newspaper editorials as an impetus to Koizumi’s ultimate goal of also reforming dozens of other state-supported corporations.

Under the accord, highway corporations will be integrated and privatized in accordance with procedures to be worked out by a third-party panel to be established later.

The government will also stop funneling 300 billion yen in taxpayers’ money into Japan Highway Public Corp. from the next financial year and let the panel review existing highway construction plans.

To push the idea through, Koizumi wooed LDP stalwarts concerned about road projects in their constituencies with a compromise over interest-bearing debts held by Japan Highway Public Corp.

The premier proposed the debts be redeemed in 50 years instead of an initially-envisaged 30 years. Such a softer term would make it easier to go ahead with the remaining road projects.

The Nihon Keizai newspaper stressed the need to choose “fair” members for the panel to make it free from the influence of special-interest lawmakers and bureaucrats.

The conservative daily Sankei Shimun noted LDP lawmakers linked to road lobbies as well as the construction industry and local administrations still demanded all the projects be completed.

A success of reforms in highway corporations will depend on whether they can reinforce the authority of the panel and repel the intervention of special-interest lawmakers and bureaucrats of the Ministry of Land, Infrastructure and Transport, Sankei said.

The ruling coalition leaders also agreed to dismantle heavily indebted government corporations which have provided low-interest housing loans and public apartments. A new housing loan body will be created.

They also agreed to dismantle Japan National Oil Corp., which has guzzled taxpayers’ money in prospecting for crude oil abroad. Part of its functions will be absorbed by another public corporation.

But another major daily, the Mainichi Shimbun, warned any new entities that oversee the disbanding of the corporations could well become destinations for retiring bureaucrats seeking well-paying private sector jobs.—AFP