Fare Increases for the Tokaido Shinkansen to Cover Soaring Linear Maglev Costs?
The total construction cost for the Linear Chuo Shinkansen, Japan’s next-generation maglev (magnetic levitation) rail line connecting Tokyo and Nagoya, is now projected to rise to ¥11 trillion—roughly $73 billion USD or €69 billion EUR. The figure is nearly double the original estimate of around ¥5.5 trillion ($37 billion / €34 billion) made when the project was first planned.
The sharp increase reflects multiple factors. According to JR Central (Central Japan Railway Company), higher prices for construction materials and labor have added about ¥1.3 trillion ($8.7 billion / €8.1 billion), while tunneling through fragile mountain rock formations—a particularly complex and risky engineering challenge—has added another ¥1.2 trillion ($8 billion / €7.5 billion). To cover potential future inflation, the company also allocated ¥1 trillion ($6.7 billion / €6.3 billion) as a contingency reserve.
This marks the second major cost revision for the Linear project. JR Central had previously raised its estimate from ¥5.52 trillion to ¥7.04 trillion, but the latest figure pushes the total far higher, underscoring the financial pressure facing Japan’s most ambitious infrastructure project in decades.
A Financial Burden Equal to 15 Years of Profit
JR Central’s consolidated operating profit for fiscal 2025 (ending March 2025) is projected at around ¥700 billion ($4.7 billion / €4.4 billion). That means completing the Linear project will consume the equivalent of 15 years of the company’s total profits, raising questions about long-term financial sustainability.
Although JR Central insists that it can maintain “sound management and stable dividends” with an additional ¥2.4 trillion ($16 billion / €15 billion) in new financing, the company also acknowledges a scenario where those conditions might not hold. In that case, it says it would slow the construction schedule to preserve its financial health.
While the company’s internal estimate assumes the line could open around fiscal 2035, JR Central emphasized that the actual start date remains undecided. Construction on some sections—particularly the controversial Shizuoka segment, where tunneling has yet to begin—has been delayed due to environmental and political disputes.
Given Japan’s persistent inflation and rising energy costs, analysts warn that the final price tag could climb even higher, possibly exceeding ¥12 trillion ($80 billion / €75 billion) by the time trains begin operating.
Regulatory Barriers to Fare Adjustments
JR Central has long been one of Japan’s most profitable railway companies, with an operating margin of about 38% in FY 2024, far above JR East’s 13% and JR West’s 10%. Much of that profit comes from the Tokaido Shinkansen, the high-speed rail line linking Tokyo, Nagoya, and Osaka—a route with exceptionally low operating costs and consistently high ridership.
However, Japan’s rail fare system is based on the “total cost method” (sōkatsu genka hōshiki), a government-regulated formula that ties fare levels to average operational expenses. Because JR Central’s cost ratio is already low, the company cannot easily raise ticket prices even under inflationary conditions.
In its latest financial briefing, JR Central suggested that this model is no longer sustainable. The company formally requested that the Ministry of Land, Infrastructure, Transport and Tourism review the fare-setting framework so that inflation-driven costs could be “flexibly and simply reflected” in passenger fares. In effect, the company is preparing the ground for a potential price increase on the Tokaido Shinkansen—a move that could spark public backlash.
Public Reaction and Policy Risks
While JR Central framed the discussion as a response to general inflation, many observers interpret it as a warning that current Shinkansen users may ultimately shoulder part of the Linear project’s financial burden. Travelers who rely on the Tokaido line, including residents of Shizuoka Prefecture—where the maglev line remains controversial—may question why they should pay more for a service unrelated to the new project.
The company is aware of these sensitivities but appears increasingly concerned that rising costs could threaten its financial stability. Even if construction proceeds as planned, the Linear line will not generate revenue for at least another decade, while capital expenses continue to mount.
Info based on: https://tabiris.com/archives/liner-202510/ Accessed 2025-10-31