The Land, Infrastructure and Transport Ministry has decided not to sell its remaining equity stakes in East Japan Railway Co., West Japan Railway Co. and Central Japan Railway Co. this fiscal year, sources close to the case said Tuesday.

The ministry planned to start selling its stakes in the three railways after a new law to fully privatize the firms was implemented Sunday.

Revisions to the JR Law allow the three firms to do business and raise funds without government approval, as was previously required.

The three companies are among the seven privatized entities of the now defunct Japanese National Railways. The firms were only quasiprivatized in 1987 and still remain partially state-owned.

The ministry intended to fully privatize each railway, but gave up on the plan for fear of exacerbating weak stock market sentiment and increasing the burden on the public if it fails to gain enough profits to pay out pensions to retired JR workers.

The ministry plans to sell its remaining stakes as soon as market conditions permit. It will continue to consult with the Finance Ministry and the Financial Services Agency, the sources said.

The government has already sold 6.22 million shares in the three companies and allocated a portion of some 2.7 trillion yen of proceeds earned from the sales to the reserved pension fund.

However, the pension fund is currently short some 3 trillion yen, and the number of pensioners, which was around 34,000 at the end of fiscal 1999, is expected to increase.

Even if the government sells the remaining 2.02 million shares now, it will only make about 1 trillion yen, and the shortage of the funds will have to be covered by an annual government subsidy of 65 billion yen.