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At present, JR Tokai is working on the "Linear Central Shinkansen", which will connect Tokyo to Osaka using magnetic levitation linear motor cars (superconducting linear cars). According to the initial plan, the line between Tokyo and Nagoya is scheduled to open in 2027, and the line between Osaka and Nagoya in 1945. Once the entire line is open, it is estimated that it will connect Tokyo and Osaka in as little as 67 minutes.

　The Minister of Land, Infrastructure, Transport and Tourism approved the construction plan in 2002, and the entire line (Tokyo - Osaka) is scheduled to open in 2045, which means that construction of the project will take at least 30 years. Moreover, the opening of the line will probably be further delayed because Shizuoka Prefecture is currently opposing the construction. (See: https://www.researchgate.net/publicatio ... aglev_Line)

　The Southern Alps Route, which connects Tokyo and Osaka in the shortest possible time, has a total construction cost of 8.3 trillion yen for a distance of 438 km, or 18.95 billion yen per km. The Inadani Route, which would bypass the Inadani Valley in Nagano Prefecture, would cover a distance of 498 km at a total construction cost of 8.8 trillion yen, or 17.83 billion yen per km.

Cost figures based on https://www.data-max.co.jp/article/41896
Accessed: 2021-05-28

Will JR Tokai be able to withstand the "1.5 trillion yen increase" in the cost of the Maglev line construction?

リニア工事費｢1.5兆円増｣､JR東海は耐えられるか
増額幅は北陸新幹線の敦賀延伸費用に匹敵

Summary based on https://toyokeizai.net/articles/-/429753
Accessed_ 2ß21-05-29

JR Tokai's financial results for fiscal 2020, announced on April 27, were the worst on record, with net sales of 823.5 billion yen, down 55% from the previous fiscal year, an operating loss of 184.7 billion yen, and a net loss of 2015 billion yen. What was rather surprising on the day was the announcement that the construction cost of the Linear Central Shinkansen between Shinagawa and Nagoya would increase from 5.5 trillion yen to 7 trillion yen. What is the breakdown of the 1.5 trillion yen increase?

In fact, it is common for public works projects to cost more than the original budget. The cost of the Hokuriku Shinkansen line between Kanazawa and Tsuruga, which is currently under construction, was 1.2 trillion yen when the construction plan was approved in 2012, but it was announced that it will increase to 1.4 trillion yen in 2019 and 1.6 trillion yen in March this year. Construction costs for the West Kyushu Shinkansen line (between Takeo Onsen and Nagasaki), which is scheduled to open around the fall of 2022, also increased from the original 50.9 billion yen to 619.7 billion yen in 2019.

Looking at the breakdown of the 1.5 trillion yen, the main items are 500 billion yen for difficult construction, 600 billion yen for earthquake countermeasures, and 300 billion yen for securing a place to utilize the soil generated. Difficult construction" refers to the fact that the construction of the terminal stations in Shinagawa and Nagoya will be more complicated than expected in terms of ground reinforcement and other works, which will require additional costs. In terms of earthquake countermeasures, the introduction of tougher guideway sidewalls and stronger soundproofing and disaster prevention hoods in the above-ground sections will require strengthening of the substructure and foundation structure, which will increase the amount of reinforcing steel and concrete.

In addition, the earth and sand generated by the tunnel excavation will be used for the seawall construction of the Shin-Honmoku Wharf in Yokohama Port in the urban area, and we will have to bear part of the cost of the seawall construction when we accept the generated earth. The cost of transporting and accepting the soil generated from the mountain tunnel is also expected to be higher than initially estimated.

What impact will the 1.5 trillion yen increase in construction costs have on JR Tokai's finances? The problem is the outlook for future earnings. Since the spread of the new coronavirus has discouraged business trips and sightseeing, JR Tokai's passenger traffic has declined more than other companies. JR Tokai is forecasting that passenger demand will recover to 66% of the FY2018 level in FY2021, and then gradually recover to 100% between FY2024 and FY2028. This is in contrast to many railroads, which say that post-Corona passenger demand will never return to pre-Corona levels.
Although it has not been talked about much, JR Tokai has been taking precautions since 2010, saying that it would adjust the pace of construction work and adjust the time to recover its management strength by reducing debt in order to deal with the risk of unexpected increases in costs and decreases in revenues. In the case of a revenue decline, this means that the company will prioritize the recovery of its financial strength over the completion of construction.

If revenues and expenditures do not recover smoothly after Corona, and if the company is unable to reduce its long-term debt, it will have a major impact not only on the opening of the Nagoya line but also on the future of the Osaka extension that will follow.


Summary based on https://toyokeizai.net/articles/-/429753
Accessed_ 2ß21-05-29

It was only in 2016 that the Linear Shinkansen - which had been a private project of JR Tokai until then - gained a firm position as a "national project". This happened after it was decided that part of the construction costs would be covered by financial involvement of the state (fiscal investment and loans).

See: https://mainichi.jp/articles/20210531/d ... 70/139000c Accessed 2021-05-31