Thursday, August 22, 2024 Japan’s ambitious plan to extend the Hokuriku Shinkansen bullet train line from Tokyo to Osaka is facing significant challenges as costs escalate, and construction timelines lengthen. The Ministry of Land, Infrastructure, Transport, and Tourism recently revealed that the estimated cost of the extension has surged to 5.3 trillion yen (approximately $36 billion), more than double the initial 2016 estimate of 2.
1 trillion yen. Escalating Costs and Extended Timelines The sharp increase in the project’s cost is attributed to rising labor and material expenses, as well as changes in construction timelines due to labor reforms. Initially, the extension was expected to take 15 years to complete, but the latest estimates suggest it could now take up to 28 years.
These developments have raised concerns about the project’s viability, particularly whether it can still pass the cost-benefit test, a crucial condition for greenlighting the construction. The Ministry did not provide an updated benefit-to-cost ratio, which was previously calculated at 1.1 in 2016.
With 1.0 being the minimum threshold for approval, the project’s future hangs in the balance. Cost-Benefit Ratio Under Scrutiny The Ministry of Land, Infrastructure, Transport, and Tourism has acknowledged the challenges in providing an accurate benefit-to-cost ratio at this time.
This uncertainty is partly due to changes in Japan’s economic landscape, particularly the rising borrowing costs as the Bank of Japan moves to normalize its monetary policy. The previous calculations were based on Japan’s ultralow interest rates, which are no longer applicable in the current financial climate. “We need to see more detailed data,” said Hiroshi Hase, Governor of Ishikawa Prefecture, one of the regions along the bullet train route, underscoring the growing concerns among local authorities.
Future Plans and Considerations Despite the uncertainties, the Ministry is committed to moving forward with the project, albeit cautiously. It plans to provide updated information by 2025, including a reassessment of the benefit-to-cost ratio and potential funding options. Authorities are currently evaluating three different routes to extend the line from Tsuruga to Shin-Osaka station, all of which involve constructing an underground section through Kyoto.
This proposed underground construction has sparked concerns about its potential impact on groundwater levels in the region, adding another layer of complexity to the already challenging project. Future of Japan’s bullet train As Japan’s bullet train extension project faces mounting costs and potential delays, its future remains uncertain. The Ministry of Land, Infrastructure, Transport, and Tourism is expected to reassess the project’s viability, with a final decision on whether it meets the necessary conditions for construction expected by 2025.
The outcome will determine whether this ambitious infrastructure project will proceed, reshaping transportation between Tokyo and Osaka..
