The opening of the Hokkaido Shinkansen service this Saturday will mark a symbolic moment for development of the super-express railway network across Japan. The new 149 km section between Shin-Aomori and Shin-Hakodate-Hokuto stations — roughly one third of it going through the undersea Seikan Tunnel — for the first time links the nation’s northernmost prefecture with the shinkansen service that stretches through Honshu all the way down to Kagoshima on the southern end of Kyushu — 52 years after the bullet train service was launched between Tokyo and Osaka.

It remains to be seen, however, whether the latest extension of the shinkansen network will bring economic and other benefits worth the investments. Hokkaido Railway Co. (JR Hokkaido), the operator of the new section, expects to incur about ¥5 billion in annual losses in the first three years of its first shinkansen service, due chiefly to the huge maintenance cost of the aging Seikan Tunnel. It will take 15 more years for the service to be extended to Hokkaido’s capital, Sapporo, possibly spreading its economic impact throughout the prefecture. The new service takes passengers from Tokyo to the port city on the southern tip of Hokkaido in four hours and two minutes at its fastest — 53 minutes faster than under the current timetable but how it will compete with air travel is unclear.

Railway services between Hokkaido and Aomori used to be linked by ferries across the Tsugaru Strait that carried the trains as well. A 1954 disaster in which five ships sank and capsized in a heavy storm, killing 1,430 people aboard, built momentum for the construction of an undersea tunnel — which was begun in 1964 and completed in 1987, paving way for the launch of train services through the tunnel the following year. But the plan to build a shinkansen line to Hokkaido, originally approved by the government in 1973, was put on hold by the time the 54 km tunnel was built at a massive cost of ¥750 billion. It was in 2005 that the final nod was given to construction of the section that opens this weekend, five years after the shinkansen service was extended to Shin-Aomori.

The Hokkaido Shinkansen has indeed come a long way. But the aging tunnel will take its toll on the profitability of the new service. JR Hokkaido estimates that its shinkansen-related expenses, including the cost of servicing the tunnel and its train, will exceed revenues by ¥5.2 billion in the business year to March 2017. The region’s heavy snowfall and extreme cold weather in winter pose particular technical challenges for the operator. To help cover the expenses, per-mileage express fares for the newly-opening section are set 20-30 percent higher than other parts of the shinkansen network.

Safety has been one of the best features of the nation’s shinkansen train services. Safety in the operation of the new section needs to be the top priority for JR Hokkaido, which came under severe criticism in recent years for a series of safety lapses in its train operation, including the derailment of a cargo train in 2013. Its current management plans to spend ¥260 billion in safety measures in five years to 2018, such as replacing and servicing train cars. But such investments weighs heavily on the finances of JR Hokkaido, which has struggled ever since it was created in the 1987 privatization and breakup of the state-run Japanese National Railways. In fiscal 2014, the company incurred operating losses in all of the train lines it services. The anticipated losses from the shinkansen operation could add to its woes.

The experience of the Hokuriku Shinkansen service, which opened last year, may bode well for the Hokkaido Shinkansen and its benefits to local economies. In the first year after the service from Tokyo was extended from Nagano to Kanazawa, Ishikawa Prefecture, on the Sea of Japan coast, the number of passengers on the extended section roughly tripled from before the move — well above the forecast of its operator, West Japan Railway Co. In addition to travelers from Tokyo and inbound tourists, the extension reportedly drew a greater number of passengers from Tohoku to the region.

Apart from the initial hype, the number of people taking the train from Tokyo to Hakodate may not sharply increase because the shinkansen service shaves travel time by less than an hour — and much less for those traveling further to Sapporo by connecting to regular express trains. But the shinkansen service will bring Hokkaido closer to Tohoku. It will now take 2 1/2 hours from Hakodate to Sendai, compared with the minimum 3 1/3 hours it takes from Hakodate to Sapporo. If the extension of the shinkansen service to Hokkaido can generate a new flow of people and create an economic sphere in northern Japan, its impact will be much more than just symbolic.

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