Panel Questions Hokkaido Shinkansen Project Profitability

Tokyo, April 24 (Jiji Press)–Japan’s Finance Ministry has released an estimate finding that a planned extension of the Hokkaido Shinkansen Line to Sapporo, the capital of Hokkaido, northernmost Japan, could fall to a level at which the project should be suspended. The ministry underlined the need to carefully examine the profitability and set appropriate leasing fees for railroads and other infrastructure charged to the operator of the Shinkansen line. At a subcommittee meeting on Thursday of the Fiscal System Council, which advises the finance minister, the ministry presented the profitability estimate for the section between Shin-Hakodate-Hokuto Station and Sapporo Station based on a projection that project costs would increase by some 1.2 trillion yen due to prolonged tunnel construction and other factors. Meanwhile, rising prices, which are one of the reasons for the increase in the project costs, may also push profitability upward through an increase in fare income and real estate income. Hiroya Masuda, acting chairman of the subcommittee, told a press conference after the meeting that the project’s continuation has already been decided. “We want to carefully examine profitability again to pave the way for deciding the leasing fees,” he said. END [Copyright The Jiji Press, Ltd.]