JR Central has indicated that the total construction cost for Japan’s Chuo Shinkansen maglev between Shinagawa and Nagoya is expected to swell to 11 trillion yen.
Although the initial estimate was 5.52 trillion yen, the figure was reviewed in April 2021, and in December 2023 the company received approval for a change to the construction implementation plan that increased it to 7.04 trillion yen. As additional cost drivers such as recent surges in prices and measures required for difficult construction have become clear, the estimate was re-examined and raised.
The construction cost will be covered primarily by operating cash flow, with any shortfall financed. Assuming, for convenience, an opening in 2035, the company says that by procuring approximately 240 million yen in addition to operating cash flow, it can secure the necessary funds while maintaining sound management and stable dividends. Funding will consist of corporate bonds and borrowings, with an assumed interest rate of 3%.
For the fiscal year following opening, operating revenue is projected at 1.64 trillion yen, ordinary profit at 65 billion yen, and outstanding long-term debt at 7.1 trillion yen. Operating revenue was calculated by adding 700 yen to the reserved-seat fare of the Tokaido Shinkansen Nozomi service and estimating passenger shifts from air travel and the Tokaido Shinkansen. The increase in revenue in the first full fiscal year after opening is estimated at about 70 billion yen.
Notice
This article was generated using automatic translation by GPT-4 API. The translation may not be accurate.
