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Minispike: The end of the line?
A rather fascinating story about the pending demise of Japan's least-used rail line:
In fiscal 2009, the line generated Y8mn (about $100,000) in revenue, not appreciably more than the annual income of a family of four (about Y6mn), yet cost Y265mn (about $3mn) to run in operating expenses, resulting in an operating loss of Y257mn, so the line loses Y32 for every Y1 it takes in. The report identifies 23 places along the line where rockfalls are possible, a further 88 where rockslides are possible, and puts the cost of ensuring the safety of the line and the safe running of trains—those words again—at Y13bn (about $150mn), mostly through the time-honored method of spraying concrete on rockfaces. To put that cost into perspective, assume that every last yen the line generates could be hypothecated to payment of the construction bill—which it cannot—and that revenues will remain static—which they will not—then it would take 1,625 years, or until around the year 3637, for the bill to be paid, or roughly a thousand years after the last inhabitant of Iwaizumi, at the current population rate to halve, pops his or her geta. |
Thank you for posting this, very interesting.
If those #s are correct the line was generating less than $300 per day vs $8200 in expenses. Even for Japan, it is astounding that they were able to keep it running for so long. |
This may become the first JR line to shut down for economic reasons, but dozens of private train routes have already been axed.
My favorite story is that of the Yokohama Dreamland Monorail. Completed in 1966 to link Ofuna Station with that classic white elephant Yokohama Dreamland, it lasted a little over a year before structural problems caused the line to be shut down. Various companies then spent the next 35 years and who knows how much money trying to make the line operational again. The final company, Daiei, kept on trying even a year after Yokohama Dreamland itself closed down, before its own financial problems forced them to give up. The final deconstruction was completed in 2006, nearly 40 years after the line's one year of service had ended. But some good did come of it all. Building on the lessons learned, the Shonan Monorail, linking Ofuna Station with Enoshima, opened as a suspended monorail in 1970. This one handled the hilly terrain much better, and is still in operation today. |
It's very surprising to see that only 16 out of 67 non-Shinkansen lines are profitable for JR East.
I wonder what are the other lines that are losing a lot of money, besides the Iwaizumi and the Tadami lines that are mentioned in the article. |
Spike Japan might be my favourite blog, period. Great in depth analysis on whatever the author chooses to write on and great stuff about Japan that is seemingly hard to find in English in other places on the internet.
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Originally Posted by swy
(Post 18663206)
It's very surprising to see that only 16 out of 67 non-Shinkansen lines are profitable for JR East.
I wonder what are the other lines that are losing a lot of money, besides the Iwaizumi and the Tadami lines that are mentioned in the article. |
Railway lines, no matter where in the world you are, are rarely profitable in and of themselves. However, if you have a strong network of real estate ventures, the railway lines act to feed people to them -- be they homes, shopping centers, entertainment venues, or otherwise. That's essentially how Japan's private railways (and increasingly JR East/West/Central) have been making their money since the 1920s.
The question about what to do with these poorly-performing rural rail lines is this: must they be profitable or break-even for them to stay operational, or should they be operated as a public service? Personally, I think the latter is best if possible, but with fewer governments willing to financially back the lines and fewer private companies willing to engage in public-private partnerships (第三セクター法人) to run them, the only option may be to shut them down and replace them with buses -- or nothing at all. |
Originally Posted by armagebedar
(Post 18664109)
The question about what to do with these poorly-performing rural rail lines is this: must they be profitable or break-even for them to stay operational, or should they be operated as a public service? <...> the only option may be to shut them down and replace them with buses -- or nothing at all.
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Originally Posted by armagebedar
(Post 18664109)
Railway lines, no matter where in the world you are, are rarely profitable in and of themselves.
At any rate, the railway operations of JR East are profitable even when you strip out the retailing and real estate operations. The same Toyo Keizai issue noted that the Tokaido Main Line alone (the commuter line, not the shinkansen) has an operating profit of over $1 billion per year, and the JR East shinkansen lines together pull in over $2 billion net per year. For kicks, I just took a glance at Tokyu and Seibu's respective IR sites, and for both companies, the transportation segment is a bigger contributor to the bottom line than their much larger (in revenue terms) ancillary operations. I also recall reading somewhere that the Tokyo Monorail (now part of JR) has been running in the black for a very long time. |
Originally Posted by joejones
(Post 18664285)
The same Toyo Keizai issue noted that the Tokaido Main Line alone (the commuter line, not the shinkansen) has an operating profit of over $1 billion per year.
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Originally Posted by hailstorm
(Post 18664522)
How in the world do they measure that? Large swathes of the Tokaido Line run in parallel with the Yokosuka Line, Keihin-Tohoku Line, even the Yamanote Line. If somebody is going from, say, Yokohama to Tokyo stations, you have no real way of knowing exactly what trains a person took to make that commute.
If you asked me to do it, I would simply allot the revenue from each fare by the fastest routing available between the endpoints. This would over-count Tokaido to some extent, but you could perhaps use actual ridership numbers (which I believe they survey from time to time, by eyeballing I guess) to correct for this. |
Originally Posted by joejones
(Post 18664597)
(which I believe they survey from time to time, by eyeballing I guess)
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I'd imagine that at larger stations they could use video cameras and automated software for people counting.
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Originally Posted by joejones
(Post 18664695)
I'd imagine that at larger stations they could use video cameras and automated software for people counting.
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Well, if you see people disembarking from the southbound Tokaido in Shinagawa, you kind of know what they are doing...
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