Amid financial struggles, local railways are increasingly turning to vertical separation (dividing the ownership of infrastructure and operations) in order to survive. See how it works in practice.
Local railways across Japan are currently facing hard times. According to the Railway Bureau of the Ministry of Land, Infrastructure, Transport, and Tourism, 80 of 96 regional railway operators are running at a loss.
One struggling railway is Omi Railway, which operations in Shiga Prefecture. In 2024, after switching to vertical separation, the company posted its first profit in 31 years.
