Japanese railway companies tap into global markets amid project boom
The public and private sectors have joined forces to sell Shinkansen bullet train technology to India and other countries, while individual companies have made successful bids for railway projects.
While Japanese firms have a leg up in safety and efficiency, their competition in the global market with Chinese and other rivals is intensifying.
On February 28, East Japan Railway Co. Vice President Yuji Fukazawa stood before 200 Indian government officials and others in New Delhi to promote the Shinkansen.
“Even after completion, this system will minimise mid- and long-term maintenance and repair costs,” he said at one of the high-speed railway seminars held in various countries by the Land, Infrastructure, Transport and Tourism Ministry.
The Japanese and Indian governments are conducting a joint survey of a plan to build a Shinkansen line between Mumbai and Ahmedabad in the west of the country.
The Indian government is expected to make a decision based on a report scheduled to be submitted by July.
International bidding for a high-speed line covering about 330 kilometres in Singapore and Malaysia is expected to be held this year.
In late January, Singaporean Deputy Prime Minister Teo Chee Hean met Japanese infrastructure minister Akihiro Nishimura at a luxury hotel in the nation.
At the meeting, Teo said he places his trust in the Shinkansen.
Nishimura later said Teo had responded positively to his pitch. “Everybody seems to be aware of the fact that there have been no fatal accidents since [the Shinkansen] started operating.”
Construction costs for both projects are expected to exceed 1 trillion yen.
If successful, it would be the second export of Shinkansen technology following the winning of a bid in Taiwan.
In its 2013 growth strategy, the government set a goal of tripling infrastructure-related exports to 30 trillion yen by 2020. Shinkansen and other railway projects are expected to be a big part of that.
The sales push is in response to a growing global railway market.
The Association of the European Rail Industry, known as UNIFE, expects the market to be worth about 23 trillion yen from 2014 to 2019, up from about 18 trillion yen from 2009 to 2011.
This growth is attributed to numerous new projects in developing countries and a desire for more environmentally friendly transport in industrialized nations.
Though Canadian, French and Chinese firms have a presence that looms large on the world stage, Japanese firms have seen success. In July 2012, Hitachi Ltd. won a contract for a high-speed rail project in Britain. In February, a consortium of five companies including Hitachi and Mitsubishi Heavy Industries Ltd. received a provisional order to build Qatar’s first subway system.
To help Japanese companies win contracts, the government last autumn established the Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development, a public-sector fund that invests in and provides financing for infrastructure projects.
Japanese firms’ main rival for a Malaysia-Singapore project is China, whose national strategy for expanding its economic influence features railway exports. Chinese companies say they can reduce project costs by a third.
India’s plan is to connect its major cities via seven high-speed rail lines, including a Mumbai-Ahmedabad link. China has shown strong interest in building some of these lines, making competition between Japanese and Chinese companies very likely.
