Print 43 comment(s) - last by mmcdonalataocd.. on Dec 28 at 11:11 AM

The company will not see financial benefits from the endeavor until the late 2020s

Central Japan Railway, better known as JR Tokai, recently announced it will fund a major $45 billion magnetic levitation (Maglev) railway system between Tokyo and Chukyo.  Even though the announcement is further commitment to the developing technology by JR Tokai, it caused a 9 percent drop in the company's stock on the Japanese financial market on Tuesday.

Maglev trains will slowly phase out the famous Shinkansen "bullet" trains, while also keeping people from flying a lot of the same distances Maglev routes will cover.  The trains operate above the ground using an electromagnetic pull that accelerates the train's speed by reducing friction between the train and track.

Japan remains dedicated towards a fully functional Maglev rail service in the country by 2025.  Japan, China and Germany are at the forefront of Maglev technology, with Shanghai being the only city that has a fully operational line.  It is likely a second route will be constructed between Nagoya and Osaka, though Tokyo and Nagoya remains the most important goal.
JR Tokai currently owns the the speed record for a Maglev train after a three-car test run in 2003 reached 581 KPH (361 MPH).

As current generations of trains expire, and countries look towards future railway technologies for transportation, some people believe Maglevs will begin to expand to other nations.

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RE: Is This Really Necessary?
By Ringold on 12/26/2007 11:30:19 PM , Rating: 2
If you read the article linked to by DT (which I just did to look for clarification), they state that they want it operational in 2025. That means I happen to of been correct; zero revenue until 2025 at the earliest, with 44 billion sprinkled out between now and then with zero return.

Their annual report is interesting.

They've already got 31.3 billion USD in long term liabilities of various sorts, 1.1 billion in annual net income. They'll be able to pull off the project but they'll have to reverse course possibly on paying down debt, which they'd been focused on apparently since 1991. The opportunity cost is huge even if their plan is sound, and not without risk, thus the response with the stock.

I also can't help but wonder if they accounted for Japan's terminal population decline in terms of riders. :P Entire small towns are being depopulated, and unless they ban contraception any plan looking that far out hopefully does take a look at the issue.

RE: Is This Really Necessary?
By afkrotch on 12/27/2007 12:11:01 PM , Rating: 2
Child birth rates are on the decline and teen suicide rates up, but immigration rates aren't on the decline. It'll just be a Japan with less Japanese and more Chinese, Filipinos, Koreans, Nigerians, Indians, and so on.

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