Japan is the country that pioneered high-speed rail travel more than 50 years ago with its legendary bullet train.
Known the world over for its sleek, aerodynamic shape, this iconic mode of transport has come to represent all that’s best about Japanese engineering, while it posts passenger numbers in the billions across the country’s network annually. In fact, so popular has it become, the flagship line linking Tokyo with Osaka is now the busiest high-speed rail service in the world, carrying almost half a million people each working day along the 425 km route in 145 minutes.
Japan says “Konnichiwa” to Maglev
Yet, 145 will soon become a mere 67 minutes, for a new £90 billion Maglev line is currently under construction and will be completed by 2037.
The significantly reduced travel time will help to create a single mega city by binding together Japan’s three principal urban centres of Tokyo, Nagoya and Osaka, with economic benefits projected to be as much as $155 billion during the line’s first 50 years of operation.
Impressive stuff indeed, yet this is just one of numerous infrastructure mega projects funded by the State, as part of Japanese Premier, Shinzo Abe’s massive government spending programme to stimulate the country’s economy, popularly known as “Abenomics”.
Maglev means “Magnetic Levitation” and constitutes an energy-efficient, reliable and durable high-speed rail system using magnets to control trains’ stability and speed. And, with friction between wheels and rail eliminated, ultra-high speeds of over 600km/h are achievable, meaning trains will deliver passengers to their destinations quicker than a plane, and with considerably less fuss!
Yet, while Maglev trains are cheaper to build and maintain than conventional trains, since they have no moving parts, the infrastructure itself is hugely expensive and requires a host of specialist machinery.
Endless Work for the Machines
17 more years of construction before the project is delivered may seem excessive, but there are compelling reasons for this timeline.
Firstly, much of the construction area sits within one of the most heavily built up areas in the world. This means 86 per cent of the line will be located deep underground, with tunnels needing to be bored 40m+ below the surface to ensure no conflict with existing land use. One such example is a 25km tunnel currently being constructed under the southern Japanese Alps, and set to be the deepest in the country upon completion in 2025.
Secondly, nature is a force to be reckoned with in Japan, so everything must be built to an extremely high standard to ensure all infrastructure across the line’s length is earthquake, typhoon, flood and even tsunami-proof!
Yet, while these factors may combine to prolong build times and push costs up, there are always winners; not least the owners of the material handling, earth moving and other specialised construction equipment, who rent them out to the Japanese contractors tasked with delivering this feat of engineering. Their machines will be working overtime to keep this mega project on track and on time.
Boom Time for Investors
So vibrant is the construction equipment rental market in Japan, the country takes bronze medal in the global revenue stakes, punching far above its weight in terms of its land mass and population, helped in no small measure by this glittering new Maglev project.
However, many other factors are helping to fuel the boom in this rental market, including infrastructure requirements for the forthcoming 2020 Tokyo Olympics, as well as ongoing recovery from various natural disasters that have afflicted the nation in recent years. Moreover, such reconstruction efforts are set to run for many decades yet, meaning this boom has long legs!
It all translates to ever rising returns for those investors smart enough to realise that when demand exceeds supply, as it does in the construction equipment rental business, he who holds the asset is perfectly placed to cash in!