2.3. Management Contract at Garage Level (MCGL)
With the deterioration of finances at both national and local
government levels in recent years, subsidies have been severely
restrained. Consequently, the institutional change in the supply
system of regional public transport has begun, specifically in public
companies, leading to a need for restructuring.
Restructuring of the management of these companies has been
carried out along different lines. While some operators became
bankrupt and implemented full-scale or partial (garage unit)
transfer of control to private operators (privatisation), such as that
in the case of Sapporo in 2004, other operators have endeavoured
to reorganise their management while maintaining their publiclyowned
status. One of the measures is to involve the private sector
by introducing ‘off the road’ competitions.
This restructuring initiative is called Management Contract
(Kanri no juitaku), which contracts out part of the services to
outside operators (affiliated organisations of public operators or
private operators). As stated, in many cases contracts are implemented
in garage base. Thus this study decide to call this restructuring
initiative as Management Contract at Garage Level (MCGL).
The first MCGL in Japan, introduced in 1991, adopted only
private and public rural bus services with an average passenger
density of less than 15 persons. Then, in 1996, MCGLs were
extended to urban bus operators with a view to improve their
management. The scope of delegation was at first ‘one-third of all
buses’, but it was expanded to one-half in 1996. In February 2008,
this fraction was raised to two-thirds by a revision of the Road
Transport Carriers’ Act.