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Iconic bullet train has yet to find its place in global rail industry

by Jochen Legewie

Without a doubt, one of Japan’s most iconic technological achievements of the last century was the bullet train. Ushering in a new era of prosperity and propelling the entire nation to the forefront of modernity, the shinkansen was an unqualified success.

It would take several decades for the rest of the world to catch up, with the first foreign high-speed trains hitting the rails of France in 1981 as the famous TGV series. Other iterations have followed, such as Germany’s ICE train, among others.

But recent moves in the United States — which is not known for recent exploits in train technology — and Brazil have dramati- cally focused attention on high-speed trains and the competition taking place among suppliers.

U.S. President Barack Obama, seeking both to stimulate the economy and promote his green-tech agenda, recently signed off on an $8 billion package to be used exclusively for developing a high-speed rail system in the U.S.

Although there already is one high-speed train operating in the U.S. — Amtrak’s Acela — infrastructure problems prevent it from tapping its 240 kph top speed. Any solution in the U.S. is certain to be sourced from overseas, where expertise in this area is much higher.

In addition, the state of California approved more than $9 billion in spending in 2008 on a proposal to build a high-speed rail link between San Francisco and Los Angeles, a project tentatively slated to begin in 2018. President Obama’s scheme specifies nine other corridors in the U.S. as potential high-speed train routes.

Other plans for high-speed transit are either under development or under way around the world.

In the Americas, Canada is interested in developing a speedy train, and Brazil is getting serious about building a bullet train link between Rio de Janeiro and Sao Paolo ahead of the 2014 World Cup.

In Asia, China is building high-speed trains in the wake of Taiwan and South Korea, while Vietnam has announced it wants such a system as well.

In the Middle East, Turkey is ready to launch its own network, as is Morocco.

In short, a global boom is about to take place in high-speed rail, but is Japan ready to capitalize?

Yoshiyuki Kasai, chairman of JR Tokai, met President Obama as recently as July to extol the virtues of its N700 Bullet Train, the latest and greatest to enter service in Japan. But Japan hasn’t been remarkably successful exporting its famous shinkansen technology overseas. To date, there have been three international installations — in Britain, China and Taiwan.

The European players have been more active than their Japanese peers. France’s Alstom, Germany’s Siemens and Canada’s Bombardier (acting primarily through a German-based subsidiary) have each developed and implemented major projects around the world.

Alstom, for example, is the world leader in high-speed rail, with 35 percent of the market, and has set up train systems in China, South Korea, Italy and Spain while completely dominating its home market of France. Additional projects include Morocco and Argentina, but the South American plan was frozen by the global credit crunch.

As for the California proposal, it’s too early to tell if there is a front-runner for the contract. Computerized mock-ups show three distinct trains are in the running: one extremely similar to the Japanese N700, another similar to Alstom’s TGV, and the last appearing to be Siemens’s Valeo.

The Brazilian contract is said to be wide open as well, with official bids due in September. A Japanese consortium including representatives from Mitsubishi Heavy, Toshiba and Kawasaki Heavy began lobbying the Brazilian government last year, but it is no surprise that Alstom and Siemens are said to be interested.

In short, there is no lack of competition in the high-speed train industry, and even though Japan leads the world in terms of experience (40-plus years) and equipment (4,000-plus trains running on more than 2,000 km of dedicated track), it is by no means a foregone conclusion that Japan will walk away with fat contracts like those up for grabs in the U.S.

Domestic competition may be part of the reason Japan has had limited success exporting the shinkansen. Although JR Tokai may have impressed President Obama, JR East is wooing foreign buyers as well as the domestic market approaches saturation. Having two Japanese builders to choose from may only create confusion among potential buyers.

In the end, the technological merits of each train alone probably won’t be enough to clear the selection process for the various rail bids pending around the world. Successful political lobbying — which has never really been a Japanese strength — could have a crucial role to play, along with appeals to the public.

For example, the California high-speed rail lobby has a dedicated presence on Facebook, with a membership of more than 37,000. Although this was essentially launched by a group of train enthusiasts, it does indicate both the level of public interest and how that interest can be cultivated.

Japanese train builders — and the politicians that support them — must learn how to wage their battles on all fronts if they are to gain the upper hand.

Jochen Legewie is president of German communications consultancy CNC Japan K.K.