Tokyo: It’s been years of their initialization in 1964 but still Bullet Tran holds the record of fastest commercial trains running on the face of the earth.
More than 50 years on, the Bullet Trains carries almost 400 million passengers each year along its nationwide network that extends some 3300 kilometres. It has come to symbolise Japan. “It represents not only the pinnacle of rail technologies, but also the Japanese culture that values safety and trust, as well as tireless pursuit for quality and efficiency — the elements that Japan wishes to present to the rest of the world with pride,” Abe says.
His message to the almost 300 industry and government visitors in Kyoto from more than 20 countries is clear. Shinkansen is about transformation, not transportation. And Japan is ready to sell high-speed rail for the 21st century, the ultra-high-speed superconducting Maglev, due to be operating within a decade that can travel at speeds of about 500km/hour.
“Kyoto in autumnal colours looks gorgeous at times and solemn at other times,” Abe tells the crowded room. “This is the perfect setting for distancing ourselves from mundane tasks and problems and letting our minds freely explore the future.”
For Abe, who arrives in Sydney today ahead of a meeting with Malcolm Turnbull, the future that Japan is eyeing is one where the shinkansen is a symbol not only of its technical prowess, but also of its economic and foreign policy success in selling infrastructure to its Asian neighbours.
This year’s sales pitch at the second IHRA forum (the first held in 2014 to mark the shinkansen’s 50th anniversary) comes amid fierce competition between China and Japan for infrastructure development across Asia, including fresh demand for high speed rail that is proliferating across the region and further afield in the US and UK.
Japan is making an aggressive pitch to be the infrastructure partner of choice, promoting its low-interest yen loans through the Japan International Cooperation Agency, a rival to the China-backed Asian Infrastructure Investment Bank, and a newly established privately-backed finance company, the Japan Infrastructure Initiative.
India, under Prime Minister Narendra Modi, has already announced it will build a shinkansen line between Mumbai and Ahmedabad, but Tokyo is pushing for its bullet train to be used on another six routes.
Japan is also in contest with China and South Korea to win the contract for a $US16bn high-speed rail project linking Singapore and Kuala Lumpur, which will cut the travel time for the 350km route to just 90 minutes.
Last year, Indonesia caused a diplomatic rumble when it chose the Chinese-state owned rail company CRRC Corp to build its new high-speed rail line in preference to the Japanese, which was contingent on a cheap bilateral loan that required a guarantee from the Indonesian government.
Japan, South Korea and China are also eyeing off the potential for high speed rail to finally become a reality in Australia.
Japan, which has had an office of Central Japan Railway Company in Sydney for the past 20 years, is eager to become involved in overseas infrastructure projects.
Under the so-called Abe-nomics of the current administration, Japan has negative interest rates and is looking to further stimulate its economy with foreign investment. The value of Japan’s highly diverse direct investment in Australia has been growing in recent years and is already worth $86 billion.
Masafumi Shukuri, chairman of the International High Speed Rail Association, says Japan stands ready to help Australia if it decided a high-speed rail project was viable.
“I think we can be of help on various fronts,” Shakuri tells The Australian in Kyoto. “Whether it is the planning of the alignment, or the financing scheme, or how to deliver value capture opportunities, or what type of institutional mechanism you would want, or how to support local development and how to ensure connectivity with other types of transport,” he says.
“But it really depends on what type of economic development Australia will pursue, what the population distribution will be like, what the urban structures of cities like Sydney and Melbourne will be, what policies the Australian people will choose — all of those things affect the impact or contribution that high speed rail can bring to the area.”
Japan’s heightened interest in an Australian high speed rail network comes as the project has received fresh scrutiny from a parliamentary inquiry, beingCHAIRED by Liberal MP John Alexander. The “issues of concern” that led to the inquiry were ones that worry much of suburban Australia: lack of infrastructure, congestion in our cities, regional decline and a lack of economic opportunity.
The bipartisan committee said the report’s conclusions were unavoidable, particularly the need for decentralisation to relieve cities of the “full burden of growth” while connecting the regions to urban centres with high speed rail. The “essential ingredient” is the increase in land value associated with the rail that will allow the infrastructure to be built — the much vaunted “value capture” model.
“When you view it at as real estate development on steroids,” Alexander says, “then the dollars stack up.”
With the Melbourne to Sydney route being one of the top-five busiest aviation routes in the world, developers believe the numbers make sense.
It would be a profound and dramatic transformation, with evidence to the committee painting a picture of Australia’s biggest cities growing without land constraints, connecting regional areas in a way that effectively brings new people within the city limits without the negative consequences of growth.
Australia’s bureaucracy has remained cool on the project which has been studied sporadically since the 1970s, most recently in 2012 when a Labor-commission report suggested a cost to taxpayers of $114 billion for a network stretching from Brisbane to Melbourne.
When a proposal for fast rail paid for by land development emerged earlier this year, the Greens quipped that the project was the train “that only runs in election years”. One character in Utopia, the popular satire of Australian politics, captured the public scepticism when she said: “We have got designs for the logo, what’s stopping us?!”
In some ways, it has become a national joke.
But the head of the Department of Infrastructure, Mark Mrdak, who spoke at the IHRA forum, offered a glimmer of hope that the bureaucracy was warming to the pitch of the transformational impact of rail, saying he agreed it was essential to address growing problems of city congestion as the country faces unprecedented rates of population growth.
“For much of the last half of the 20th century, Australia invested very heavily in private motor vehicle and our motorways to facilitate our economic growth, but in the decades ahead we are looking much more at rail to underpin our national development, principally because much of our economic growth will take place in our four major cities,” Mrdak told the forum.
“Increasingly the future for us on high speed rail and higher speed rail is going to be how to connect those outer metropolitan and regional cities into our major economic focus around our CBDs and the employment centres of the future.
“Over time, high speed rail will play a larger role in our national transportation task, I have no doubt about that, but our initial focus is going to be around how do we improve that connections between our outer metropolitan and our inner city areas through much higher speed rail.”
In evidence to the committee, director of central Japan Railway Company Torkel Patterson explicitly advised the committee not to build high speed rail for the purpose of transportation.
“But if you want a transformation, if you want to connect and improve the region, connect them and make this economy of Sydney and Melbourne more competitive globally internationally, then high-speed rail is what can let you do that,” he said.
Tellingly, he advised the committee that JR East, one of the seven Japan Railways Group companies, received most of its revenue not from high speed rail operations “but from the shopping centres”.
“JR East owns the station buildings and the property and its revenue came from the businesses associated with the stations,” he said.
While Japan has been viewed as a most likely infrastructure partner for an Australian high speed rail project, China and South Korea are also keen to be a part of the multi-billion dollar project.
The Chinese Centurian group told the committee that a line from Wollongong to Campbelltown could be built by 2023 if it could ink a deal with the NSW government within 18 months in what would be the firstSECTION of its proposed fast rail between Canberra, Sydney and Newcastle.
Centurian says the “conservative” value they could recover from property sales of about $3.75bn would cover the cost of the first stage.
But in an indication of the scope of the work associated with the project, Centurion Group chief Patrick Yu told the committee that it would be impractical to build the “whole thing in one go.”
“There are simply not enough engineers,” he said. “There are simply not enough human resources in Australia to do that. If we did that we would increase the cost of construction. We would have a big bump in costs for supply materials. We would murder the construction industry. We would because we would suck up steel, concrete, people and engineers. There would be no one left to do anything else but our project.”
Spacecon, a Korean consortium “with access to Korean technology, experience and finance”, wants to build the first stage from Sydney to Newcastle, a 140km link, followed by Newcastle to Canberra and then Newcastle to Brisbane.
After crunching the numbers, the company said it believed there was “significant profit” if it was allowed to develop the project based on vigorously tested estimates, with before tax revenue after building the project of $41.5 billion.
“We have a great opportunity to shape the funding and participation in infrastructure projects in Australia. Value creation, or value capture, enables all parties — the federal, state and local governments; the technology providers; the consortium; and the community — to have agreed and predetermined benefits,” John Moore, a consultant to Spacecon, told the committee.
One of the most high-profile proponents of an Australian high speed rail project is an Australian group called CLARA — Consolidated Land and Rail Australia — which has a plan for eight new “smart” cities along the rail corridor between Sydney and Melbourne to fund the infrastructure.
In a sign of its faith in the project, CLARA has put its money where its mouth is, already securing close to 20,000ha of land through purchase options for new city sites that provide the financial underpinning for the building of the fast rail.
CLARA wants to start with the Melbourne to Shepparton route, and has the enthusiastic support of the local council to push ahead with its plans next year, followed by links from Sydney to Goulburn, and then south to Canberra, before linking up the two capital cities.
It doesn’t want a cent of state or federal government capital to make it happen. It wants something perhaps more difficult — a policy foundation based on a population strategy and streamlined environmental approvals.
CLARA says its project would not just be a game changer, but a “conversation changer” about where people wanted to live that would become more urgent as our cities become less liveable.
The prospect of high-speed rail connecting Australia’s biggest cities, one that comes with the bonus of abundant affordable housing and little cost to taxpayers, sounds too good to be true.
Not all evidence to the committee was positive. The Department of Infrastructure cautioned that there may not be decentralisation, with other factors potentially working against the transport-led revival of the regions.
The Bureau of Infrastructure and Regional Economies said there had been very few examples where government-driven decentralisation had worked, saying it was pushing against global forces that were leading towards urban centralisation. Others doubt the project can be funded without substantial and ongoing government subsidies.
CLARA’s chairman Nick Clearly, one of the most enthusiastic proponents, remains frank about the need for each of his proposed eight smart cities to have an anchor tenant that provides at least 10,000 jobs — or the concept won’t work.
But with Japan, China, Korea and an enthusiastic Australian group all wanting to build Australia’s very fast rail link, the question remains: do we want it? Industry Minister Greg Hunt recently sent ripples through the industry after a visit to Korea and China when he quietly told an ABC local radio station that “now is the moment” for the government to progress plans for high-speed rail on Australia’s east coast.
“One of the things ... as a cabinet and with the Prime Minister we’ll put forward is developing the idea of a Melbourne to Sydney, potentially Melbourne to Brisbane ... very fast train,” Hunt said. “I think now is the moment when this can and should be considered.”
Alexander’s enthusiasm for the project is well known. (He recently told The Australian: “If I was Prime Minister for a day, this is all I would work on.”)
And unsurprisingly, he is upbeat about the prospects of high speed rail on Australia’s east coast, saying it “ticks all theBOXES ” to meet the Mr Turnbull’s vision for the nation.
“Malcolm Turnbull says this is the most exciting time to be an Australian, well this is exciting — we are going to be agile, we are going to move quickly, we are going to be innovative — if you think about those words and you think about this project, you know what he is thinking about,” Alexander tells The Australian. “There will be jobs and growth, and you can tack on to it affordable housing as well. This is absolutely a literal blueprint of Malcolm’s vision for Australia, and that is what makes me as excited as Malcolm.”
From the Japan experience, CJRC director Torkel Patterson said Australia could see the benefits in action and warned that doing nothing to ease congestion in Sydney and Melbourne was not an option.
“If you do nothing, the cost of supporting that infrastructure is going to be much more expensive than this opportunity you have to spread this population out,” he said. “Yes, it sounds like these cities are small, but as you build them — I hate to sound like the baseball game — they will come. That is the case of Japan’s example.”