JR Central Falls Most in 1 1/2 Years After $68 Billion Maglev Cost Report
Central Japan Railway Co. fell the most in more than 1 1/2 years after the government said a planned magnetic-levitation line linking Tokyo and Nagoya may cost more than the company forecast.
JR Central, the nation’s largest operator of high-speed trains, fell 5.7 percent, the biggest decline since March 12, 2009, to close at 609,000 yen in Tokyo trading.
The maglev line, scheduled for completion by 2027, may cost 5.5 trillion yen ($68 billion), according to a report released by the transport ministry yesterday. JR Central, which plans to fund the project itself, expects the line to cost 5.1 trillion yen, Michiko Ishizu, a spokeswoman, reiterated by phone today.
“The current estimate may increase,” said Yasuhiro Matsumoto, an analyst in Tokyo at Shinsei Securities Co. “It’s too much for one company to pay.”
JR Central’s cost estimate is based on the shortest of three possible routes being considered for the line. The Nagoya- based train operator has yet to decide which route it will use.
U.S. Transportation Secretary Ray LaHood rode on a 502 kilometers-per-hour (312 mph) maglev train at JR Central’s test track in May. A Maglev system uses magnetic power to propel trains that float above the track.
A maglev train, built using technology developed by Siemens AG and ThyssenKrupp AG, is in commercial operation in Shanghai. Passengers there are whisked along at 431 kph from Pudong International Airport to the outskirts of the city’s financial district.
Japan’s maglev holds the world rail-speed record at 581 kph.
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