State Funds to Cover Part of Extra Shinkansen Extension Costs

December 18, 2018

Tokyo--Japan's transport ministry plans to cover part of extra costs for the extensions of the Hokuriku and Kyushu Shinkansen bullet train lines with state funds, aiming to complete and open the extended sections in fiscal 2022 as scheduled.

At Tuesday's meeting of a relevant ruling bloc project team, the ministry said it plans to seek 79.2 billion yen under the government's fiscal 2019 budget, to partially cover the add-on costs, up from the initially requested 75.5 billion yen.

The construction costs are now seen rising by about 350 billion yen in total from the earlier estimate for the Hokuriku Shinkansen extension to link Kanazawa Station in Ishikawa Prefecture, central Japan, and Tsuruga Station in neighboring Fukui Prefecture and the route between Takeo-Onsen Station in Saga Prefecture, southwestern Japan, and Nagasaki Station in Nagasaki Prefecture, next to Saga, on the Kyushu Shinkansen Line.

Discussions have been under way on how to cover the extra construction costs, which mainly reflects rising labor expenses.

Shinkansen construction costs are firstly funded by usage fees paid by Japan Railways Group companies, and then two-thirds of the reminder are shouldered by the central government and the rest by relevant local governments.

As well as the additional state funds, the ministry presented at the ruling bloc meeting a plan to utilize 65.2 billion yen from fees to be paid by East Japan Railway Co. <9020>, or JR East, Central Japan Railway Co. <9022>, or JR Tokai, and West Japan Railway Co. <9021>, of JR West, for the assignments of Shinkansen facilities built during the era of the Japanese National Railways. The three JR companies are to pay for the assignments until fiscal 2022.

Of the extra construction costs for the two new Shinkansen sections for fiscal 2019, 43.2 billion yen will be covered with usage fees, and 20 billion yen by the central government and 10.1 billion yen by local governments. Jiji Press