[JP] Shinkansen and Maglev

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Miss Maglev
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[JP] Shinkansen and Maglev

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The Linear Central Shinkansen Line.
What is JR Tokai's 'argument'?

 The talks between JR Tokai and Shizuoka Prefecture over the Linear Central Shinkansen Line are about to be carried over to FY2024 without any concrete progress. In the first place, when JR Tokai announced in 2007 that it would build the Linear Line with its own funds, the planned opening date was 2025 (later postponed to 2027 due to the Lehman Shock). 'In just one year, the Linear Line will be in operation!' Could such a world be possible?
 The various issues involved in the Linear Linear project cannot be discussed in just a few articles, and it is difficult for the author, who has no specialist knowledge, to verify the merits or falsehood of the claims made by Heita Kawakatsu, Governor of Shizuoka Prefecture, Takashi Namba, Mayor of Shizuoka City and the heads of the municipalities in the Oigawa River Basin. The author would like to leave the big picture discussions to the parties concerned, the Ministry of Land, Infrastructure and Transport, the Council of Experts and the Expert Groups.
 The author would like to consider the issue of communication to the general public. Although JR Tokai is often regarded as a 'secretive' company, it actively discloses information on its website, including various documents on applications, procedures and contracts, as well as FAQs (frequently asked questions).

 However, the information is somewhat formal and not in language that reaches the public. I suspect that this lack of communication is one of the reasons why public understanding and interest has not fully grown.

 What is JR Tokai thinking about? At the moment, there may be various things they can and cannot say, but that is why we would like to hear what they have to say. We decided to ask Tomofumi Ikeda, head of the Tokyo Public Relations Office of the JR Tokai Public Relations Department, questions that many people may have had in their minds in a vague way.

 Please note that this article is not intended to verify the truth or falsity of the company's answers, nor is it intended to discuss the pros and cons. Please note that the purpose of this interview is to elicit the company's official position, which will form the premise for future discussions.
The Shinagawa-Nagoya link has to be completed.
we can't get anywhere beyond that.

-While the start of construction of the Shizuoka construction zone has been delayed, Governor Kawakatsu claims that the rest of Shizuoka is also behind schedule. Are the other construction zones progressing according to the original schedule (opening in 2027)?

 Everywhere else is facing difficulties. Some are on schedule, some are not (as planned), and it is true that the process is very tight.

--In monetary terms, how much progress has been made towards the total construction cost of 7 trillion yen?

 The cumulative capital investment from FY2014 to FY2022 is approximately 1.5 trillion yen.

-The plan for FY2023 is 340 billion yen. Although civil engineering works, such as tunnel excavation, are not yet in full swing, is that still about right?

 Construction work does not proceed all at once, but has to start early with the construction sections that take longer, such as the Shizuoka construction section (Southern Alps Tunnel), Shinagawa Station, Nagoya Station and the emergency exit excavation work for the urban shield tunnel transmission base. However, Shizuoka has not been able to start construction work for six years since the 2017 construction contract.

-The railway cannot open for business unless any part of it is completed. So the Shizuoka construction section, which was supposed to be ahead of schedule, has become a bottleneck.

 There are parts of the project that are on schedule and parts that are not, and we are still aiming for an early opening, but we are checking the progress of each construction section and considering how to proceed as a whole to ensure that it is appropriate. There are areas where construction costs will increase if we rush, and we need to consider which is the most reasonable.

-The delays in the Shizuoka construction zone are affecting other progress, so it is now difficult to make a simple comparison with the original schedule. In the case of the Shizuoka construction zone, taking into account the announcement in 2020 that now is the time limit for starting construction in order to open in 2027, even if construction were to start immediately, it would not open until 2034 or later. If that is the case, can't the Nagoya-Shin-Osaka section, which was originally scheduled to open in 2037, be built at the same time and opened all at once?

 Some people argue that we should just do everything at once, but it is impossible to do both at the same time, both in terms of human and management resources. The construction team will move between Nagoya and Shin-Osaka as soon as they are completed. If we can't get to Nagoya, we can't get beyond Nagoya.

--At the end of last year, you announced that you had started the environmental assessment of the Nagoya-Shin-Osaka section, but was this in line with the original schedule of Nagoya opening in 2027 and Shin-Osaka opening in 2037?

 There is no clear link there. We have been exchanging opinions and gathering information with the municipalities along the line on what steps to take with regard to construction west of Nagoya. Where we have reached a consensus, we are talking about taking it one step further and conducting a survey.

 In both Nara and Mie, we have started a borehole survey to start researching potential station sites, but even so, I don't know if all the assessment procedures west of Nagoya will progressively move forward. I think it is all about doing various research from what is ready.

-In recent years, there have been a series of cases where project costs have increased due to soaring prices and labour costs: the construction cost of the Shinagawa-Nagoya line in 2021 has increased from ¥5.5 trillion to ¥7 trillion, but is there any fear that it could expand further?

 Naturally, since the figures are for 2021, we have to consider whether there is a need to update them, but at the moment we think that we can keep the 7 trillion yen figure as it is, since some parts are costing more and some parts are costing less due to technological development.

 The main breakdown of the ¥1.5 trillion increase is about ¥0.5 trillion for dealing with difficult construction work, ¥0.6 trillion for improving earthquake countermeasures, and ¥0.3 trillion for the additional costs required to secure the use of soil generated from tunnel excavation.

 So it does not mean that the same construction work will become more expensive as materials continue to rise in price. I think it is quite possible that costs will rise in the future, but we estimate that by devising ways of doing this, we will be able to reach Nagoya with a construction cost of 7 trillion yen.

-As Governor Kawakatsu insists on 'partial opening', I think there is a view that assets that have been invested a huge amount of money should be put into operation as soon as possible. Would delays in opening the new plant not affect its management?

 Textbook-wise, there is no better way to ensure that the capital invested produces a return as quickly as possible. It can be seen as an annual wasteful flow of interest on the funds raised.

 On the other hand, every year that passes brings in about JPY 500 billion in cash flow from the Tokaido Shinkansen, so if you look at the figures alone, the longer the opening is delayed, the better the financial situation. The sooner it is built, the better, but it does not mean that the longer it is delayed, the more it will be strangled and the more it will be attacked by the military.

-The era of ultra-low interest rates may be reaching a tipping point, with the lifting of the negative interest rate policy, but how will higher interest rates affect the significant increase in long-term debt?

 Interest rates are not the only reason for low interest rates. The average interest rate on the ¥ 3 trillion borrowed from the FILP is 0.86%, and the average interest rate including other borrowing is 1.6%, but in the plan we have estimated the interest rate at 3% and confirmed that this is not a problem. We would be surprised if interest rates go up to, say, 5% in the future, but we don't think it will be a problem even if they go up slightly.
--Speaking of profitability, in September 2013, then-President Yoshiomi Yamada attracted a lot of attention when he said that the linear line would never pay for itself. What was the true meaning of this statement, which is still invariably brought up in arguments against linear transit?

 I think he meant to say that the purpose of Linear was not to make more money by combining it with the Shinkansen. The main purpose of the Linear project is to avoid risk. The Tokaido Shinkansen will be converted into a dual system to create a secure transport system for the future.

 The assumption is that Linear will be managed centrally with the Tokaido Shinkansen, so investment decisions are not made with a point of view on whether or not the investment can be recovered independently or the number of years it will take to recover the investment.

 For this reason, it is not well received by investors, with some saying, "Why would you do that if you are going to lose money?". However, shareholders are not the only stakeholders. Also, investors can Exit from the market, but we cannot.

-The biggest 'risk' is a huge earthquake such as the Nankai Trough, but are you fully prepared for it?

 As long as Tokyo, Nagoya and Osaka are connected, fault lines are bound to cross. In a sense, this is like fate. We avoid faults as much as possible when selecting the route, but if we must cross them, we try to make the fault and tunnel intersect perpendicularly and reinforce the intersections. This is a basic principle of railway construction, not just linear railways.

 We are often asked about the effect on the tunnel if the fault shifts. In fact, during the construction of the Tanna Tunnel on the Tokaido Main Line, the North Izu Earthquake of 1930 caused the tunnel section to shift by approximately 2 metres.

 However, according to various internal and external experts, the likelihood of the fault moving at the same time as the earthquake is not high. In the Noto earthquake, traces of a slow uplift of the ground can be seen after the tsunami.

 Like the Shinkansen, the linear trains use an early earthquake warning system to detect P-waves and stop as soon as possible before they affect the equipment structures.

 However, it could be dangerous if a huge earthquake occurs when crossing a fault line, and the fault line moves instantly in a place where the brakes cannot be applied in time to stop the train, and the train ploughs into it. Nevertheless, I honestly wonder what the probability of such a thing happening is.

-It's true that if you go that far, it's not just limited to linear trains.
What I felt again through the interview was JR Tokai's strong sense of mission and pride in the Tōmeihan transport system. As a result of investing a large amount of capital in the Tokaido Shinkansen since its inception and continuing to improve its functions, the number of passengers has increased by more than 1.5 times, and the line generates an annual cash flow of approximately JPY 500 billion.

 The debate over the Linear Line is essentially about 'what to do with the money earned from the Tokaido Shinkansen'. From the investors' point of view, they would like to see the money invested in profitable related businesses or returned in the form of dividends, rather than being spent on the Linear Line, which is "unprofitable". Users, on the other hand, would like to see fares and charges reduced.

 In addition, the Shinkansen's earnings are inextricably linked to the former Japanese National Railways' debts: the JR Tokai inherited approximately JPY 5 trillion of the former JNR's debts, but the balance had fallen to less than JPY 2 trillion in FY2015. Now that the expansion of the Tokaido Shinkansen's transport capacity has come to an end and the repayment of the former JNR's debts is on track, it has no choice but to find new ways to spend the money. From JR Tokai's point of view, it is certainly rational to use the linear line as a dual system for the Tomei-Han transport system, which is its own identity.

 Some think that if the Tokaido Shinkansen is so profitable, the former Japanese National Railways should have been made to pay more of its debts. In the case of Japan National Railways (JNR), which operated all the country's railways in one pool, the Shinkansen's earnings (in terms of calculation) filled the national deficit thinly and widely, but while JR Hokkaido, JR Shikoku or any other loss-making local railway in the country is in danger of closure, it is not satisfactory that JR Central has made enough profit to fill all of its losses.

 These are certainly viable 'thought experiments', and perhaps we should reflect on the fact that they did not happen. However, as long as the privatisation of Japan Railways proceeded under such a system and JR Central was established as a wholly private company, there is no going back now.

 Although I may be scolded for being too much on JR Tokai's shoulders, the purpose of this report is to listen to JR Tokai's "arguments" and decipher their intentions, and I have not ventured beyond that point. Verification and discussion will be left for another time and stage.

Info based on translated Japanese News. Source: https://diamond.jp/articles/-/340986 Accessed 2024-03-26

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