Japan Rail Infrastructure Revenue Analysis: Ken Research


Trains are considered as a symbol of modernity in Japan. The high-speed bullet trains of the country are known to be best in the world and countries across the world want to make them a part of their infrastructure. The railway system holds a lot of importance in the country. Railway has connected the three largest metropolitan cities in Japan- Tokyo, Osaka and Nagoya, which has immensely benefitted the businesses by making day trips possible between these cities. The tickets for the high-speed trains are expensive but the people are ready to pay the amount for these trains. About 143 million people annually in Japan use the railway. The infrastructure for railways includes rail bridges, railway stations, terminals, rail buildings, rail tunnels and rail tracks.

According to the market research report “Rail Infrastructure (Construction) in Japan: Market Analytics by Category & Cost Type to 2021“, the shinkansen has the widest car body as compared to any other high speed train system which provides space for more passenger as well as comfort. Small tunnel cross sections are needed for it as the car body offers excellent air tightness.The high-speed trains have high-priced tickets but despite this fact, the majority of revenue of railways is earned from passenger tickets at JR East from the slower, conventional railways. Therefore, even though the high-speed trains are the highlight of railway system in the country, the development of the existing railway lines is also essential. The investment in expanding the high speed as well as the conventional railway system is the key for growth of the industry.

The planning system of railways encourages the construction of houses and commercial buildings alongside the railway route, which is another factor, which has allowed the development of the effective railway system. The companies providing railway services own the land around the railways and have the right to let it out for construction of shopping malls, flats, blocks of office etc. This largely contributes to the revenue, which is then reinvested in the expansion of the network. The Japanese bullet line has developed a lot because of these funds.

East Japan Railway Company (JR East) is constructing a new railway station named Shinagawa Shin-Eki in Minato in Konan district under the Shinagawa redevelopment project that started in 2014. The construction of the new station began in February 2017 and is expected to be completed in 2020.  It will form a part of the Yamanote Loop line and the Keihin-Tohuku line. The station will be opened for public use only after all the construction work including the dinning and shopping facilities inside the station will be completed. The full-fledged operations are expected to start by 2024.

Japan has been trying to infrastructure development projects abroad but has been unable to get many projects recently. It has lost to a Chinese bidder for the development of high-speed rail project in Indonesia. The country is currently very interested in developing the Bangkok-Rayong high-speed rail project in Thailand that will serve as a link among the Eastern Economic Corridor and three international airports. Public Private Partnership is being considered for this development.The bidding for this project will start at the end of 2017.  Thailand has been offered loans by the Japan International Cooperation Agency for the construction of the high-speed train, which is expected to use Shinkansen technology.

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