Japan hopes to export most experienced high speed rail to US

Central Japan Railway, one of Japan’s high speed rail operators earning more than US$ 15 billion annually, with Japanese project finance lender JBIC and with relevant companies, is bidding for Florida’s high speed rail planned to launch in 2015.
Florida Department of Transportation (FDOT) is currently in the process of qualification of bidders for “Design-Build-Finance-Operate & Maintain” concessionaire covering 86 miles between Orlando and Tampa. Also it is planning to build 240 miles between Orland and Miami, though its procurement plan isn’t disclosed.
High speed rail in Florida has been longed for a quarter century, according to the presentation of information sharing conference held by FDOT, by political leaders as well as business community, since populations are increasing while transportation between major cities is limited to often jammed car driving. After completed, Orlando - Tampa route will take about 60 minutes, that is 30 minutes shorter than current car driving. Also visitors to Disney World or passengers of Orlando International Airport will welcome it.
FDOT was already awarded stimulus fund of American Recovery and Reinvestment Act, which amounts to $ 2.05 billion to build Orlando - Tampa and to plan 240 miles rail of Orlando - Miami. But total capital expenditure would easily exceed the amount even after matched fund required under 80/20 rule of the act is added. The awarded concessionaire should finance the gap by themselves in a scheme of PPP. The concessionaire assumes ridership risk, too.
Realistically, for Japan’s high speed rail export team led by Central Japan Railway, this is the first experience of selling high speed rail system to foreign country, though some of them sold major components of HSR to Taiwan several years ago.
Shinkansen bullet train, which currently runs through 1,350 miles all over Japan, has a long history of operation. The first Shinkansen between Tokyo and Osaka having top speed of 130 miles per hour commenced in 1964. The latest Shinkansen used for daily operation has top speed of 186 miles per hour, though it isn’t the fastest in the world at present. Its completely different railway system from ordinary train may contribute to the record of no death toll accident since 1964. With no doubt, it is the safest HSR in the world. Japanese team strongly hopes to sell it not as a part (e.g. passenger car only) but as a whole system, because the system seems so integrated that any components should not be treated separately.
Central Japan Railway also has next generation HSR, a maglev system having top speed of 360 miles per hour, which has been running on experimental route everyday, in recent years, though planned sales to Florida is current Shinkansen.

The key to realize this deal is apparently project financing to fill the gap between actual spending and available budget from FDOT. One of the Japanese team members, JBIC (Japan Bank for International Cooperation) is government owned lending bank specific for overseas mega deal. As Japanese government is accelerating infrastructure export rapidly, the role of its project finance arm has become critical. For the deal of Florida’s HSR, teams from France, UK, China and other countries are competing.

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The author of this arcitcle, Daisuke Imaizumi, is an independent researcher and a journalist previously working for the largest network equipment company of US as a consulting researcher for seven years. Originally, IT oriented journalist having experience on electronic commerce, retail financial service and asset management system for electric power company. Also he has some experiences on Internet centric new business incubation.
Regarding infrastructure investment, he became interested in this area after studying Smart Grid and Smart City which are included in infrastructure investment in a broader sense.
email address: dimaizum(at)gmail.com