JR Kyushu IPO set for October 25

JR Kyushu will become the fourth of the former Japan National Railways to be listed on the stockmarket on October 25, reports Nikkei Online (J). The government is selling all its shares in the company at an initial price of ¥2600 (22.76 euro) per share

Operating on the most southern island of Japan, the company battled losses for many years, which prevented earlier plans for its full privatisation. The company managed to change its fortunes by moving out of its traditional core activity, and is currently earning have its income from other sectors such as real-estate, hotels, catering and agriculture.

The privatisation will mean that JR Kyushu will no longer fall under the framework of public procurement, leaving only JR Hokkaido and JR Shikoku. Public procurement opportunities in the railway sector thus far have been severely limited by Japan's application of the Operational Safety Clause. There are however reports related to the ongoing EU-Japan FTA negotations that Japan is intending to move towards a less strict application. 

It is not yet known, whether JR Kyushu will follow JR East, JR Central and JR West in voluntary publishing procurement opportunities for foreign audiences. The three have published their procurement plans online since the EU Commission agreed to relinquish its demand to have Japan's privatised railway companies included in the WTO Agreement on Government Procurement. 

For JR Kyushu the main issue will remain to make its railway business profitable on its own. For its railway earnings, the company will primarily depend on its activities in the Northwest of the island, where most of the population is concentrated in cities like Fukuoka and Kitakyushu. The rest of the island is facing a decline and ageing of the population, negatively affecting demand for public transport.