Just what the sagging state coffers needed-an additional 1.2 trillion yen in Shinkansen construction.

But that's exactly what a panel of government and ruling coalition officials has in mind for fiscal 2005.

The panel is poised to approve three costly bullet-train projects: one in Hokkaido at a cost of some 500 billion yen, one in Hokuriku at 390 billion yen, and one in Kyushu at 270 billion yen.

The panel plans to pay for the construction by earmarking 1 trillion yen in the Shinkansen's fiscal 2013 to 2017 budgets. All current bullet-train construction is scheduled to be completed by fiscal 2012.

But how to finance the projects in the meantime? The panel says the government will borrow the money, including from the private sector, using as collateral the 330 billion yen in future revenues Japan Railway companies, the Shinkansen's operators, are obliged to pay the government starting in fiscal 2013.

JR companies currently pay about 70 billion yen annually for existing Shinkansen assets the government has transferred to them since their privatization.

Interest payments on the proposed loans are expected to be around 30 billion yen, but government and coalition officials argue that the loans can be paid off by simply cutting down on construction costs.

An official at the transport ministry's Railway Bureau says that debt financing is a viable option because the money from JR companies is guaranteed.

``It means we'll have money to repay the loans, and that puts our plan on sound footing,'' he said.

But Finance Ministry officials worry the panel's plan amounts to nothing more than reckless borrowing, which may in the end require additional state funding and put further strain on efforts to revive the nation's tattered finances.

The panel, tasked with deciding which Shinkansen sections to start construction on, will decide upon the details of the plan at a meeting Friday.

But the panel is not expected to set specific target dates for when the new sections will begin operating or specify exactly how to secure the 200 billion yen shortfall in funds.

Instead, it will continue discussing those issues and present recommendations to a Shinkansen development program committee made up of Cabinet ministers, who are scheduled to meet in mid-December.

The Hokkaido section will link Shin-Aomori in Aomori Prefecture and Shin-Hakodate in Hokkaido. The Hokuriku section will run between Toyama and Kanazawa.

The Kyushu section will connect Takeo Onsen in Saga Prefecture and Isahaya in Nagasaki Prefecture.(IHT/Asahi: December 9,2004)