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Maglev’s economics as dizzying as its speed

by

Bloomberg

Japan’s faded economic prowess received a boost after a maglev magnetically levitated train operated by Central Japan Railway Co. on Tuesday clocked a new world speed record of 603 kph on a test run in Yamanashi Prefecture.

Whether any of this makes a shred of economic sense is another matter.

“It’s good for growing, developing countries, but not for Japan that’s decreasing in population,” said Edwin Merner, president of Atlantis Investment Research Corp. in Tokyo. “It’s misallocation of resources. Demand for bullet trains will be limited.”

Japan, which faces intense competition from China, France and Germany in the global market for high-speed rail transport, has not found any takers for its maglev technology overseas despite an aggressive marketing effort by Prime Minister Shinzo Abe, who has staked his premiership on restoring economic dynamism.

There are plans to build the high-speed maglev line from Tokyo to Nagoya and Osaka. The segment between Tokyo and Nagoya is expected to be ready by 2027 at a cost of around ¥5.5 trillion, with Osaka being connected by 2045 at an overall project cost of some ¥9 trillion.

The next-generation technology relies on magnetic power to float the cars above ground, eliminating the friction of steel tracks. The trains start off running on wheels until they hit a speed fast enough for the magnets to kick in and create lift.

In theory, maglev technology could redefine city-to-city travel worldwide. The 4,200-km journey from New York to San Francisco, with no stops, could be covered in seven hours at this speed, for example. A London-Paris journey via the Channel Tunnel, one of the world’s most popular high-speed routes, would take 50 minutes, one-third of the current time.

Abe, who heads to the U.S. for an official visit from Sunday, has said his government may provide financing to support a bid by JR Central to provide trains for a proposed Washington-Baltimore line.

The Northeast Maglev, a company based in Washington, is exploring the creation of a maglev system with JR Central in one of the most congested transportation regions in the United States. No formal agreements have yet been reached.

Concerns about high construction costs and uncertain demand have spawned resistance to plans for high-speed rail in the U.S. and the U.K.

California is struggling to lay tracks for an $86 billion high-speed line after Congress cut off funds for such projects. The California High Speed Rail Authority has also been working to settle lawsuits challenging the project.

The U.K. government faces resistance to plans for its High Speed 2 rail link between London and Birmingham, scheduled to open in 2026 before being extended to Manchester and Leeds. The U.K. Institute of Directors has called on the government to abandon the plans, arguing that its £50 billion (nearly ¥9 trillion) price tag is too steep.

Even in Japan, it is unclear the heavy investment in a maglev system will pay off given the nation’s alarming demographic trends. The population may fall to 117 million by 2027 from 127 million at present, according to projections by the National Institute of Population and Social Security Research. By 2060, the overall population may shrivel to 80 million.

Worldwide, two maglev lines are already in operation. In Shanghai, a train built with technology developed by German multinationals Siemens AG and ThyssenKrupp AG whisks passengers along at 431 kph — 172 kph short of JR Central’s record — from Pudong International Airport to the outskirts of Shanghai’s financial district.

The speed record for a train running on a national railway system, rather than a test track, remains in the hands of conventional rail, with a modified version of an Alstom SA TGV model reaching 575 kph in France in 2007.

The maximum operating speed for a regular service on a conventional line is 350 kph, between Beijing and the northeastern Chinese metropolis of Tianjin, while West Japan Railway Co. holds the highest average speed, at 262 kph, between Hiroshima and Kokura, according to Guinness World Records.

The biggest global rail project up for grabs at the moment does not rely on maglev technology, however. China’s top train-maker, the CSR group, is going head-to-head with European rivals such as Alstom in bidding for a range of contracts including rolling stock for Britain’s High Speed 2 project.

  • KenjiAd

    This story reminded me of the construction of Battleship Yamato. Why would anyone in the right mind spend that kind of money on a railroad system that would never be able to compete with airplanes?

  • Bernard Quasaar

    Please please please. Put this in Halifax to Vancouver in Canada. That would be amazeballs….