A high-ranking official from the Ministry of Railways in India was one of the viewers amazed by the video. When he received a Japanese delegation promoting the Shinkansen in February 2015, he said he was not only convinced of the Shinkansen’s safety record, with no casualties in 50 years, but also impressed with its efficient operation as described in the video.
At Tokyo Station, JR East handles 438 arriving and departing Shinkansen trains per day during a peak season using just four tracks with an average standing time per train of 12 minutes including the “miracle” cleaning time of seven minutes. Surprised to hear about this, the Indian official said jokingly that it would take more than seven minutes for Indian passengers just to get off the train.
However, in a few years’ time, people in India may see the same miracle happen when the Mumbai - Ahmedabad high-speed railway corridor project starts operation in collaboration with Japan.
Railways played a highly-significant role in the rapid economic growth of Japan after World War II, and now, Japan’s JR Group alone carries over nine billion passengers a year. Japanese railways are also known for their success in investing in railways as well as promoting commercial, residential, and educational areas alongside the railway thereby generating a positive impact and recovering the huge initial investment.
Japan International Cooperation Agency (Jica) is the principal Japanese government agency engaged in international development. It provides financial and technical assistance to partner countries through Official Development Assistance (ODA) with the aim of contributing to the peaceful development of the world. Embracing the vision of “inclusive and dynamic development,” Jica pursues two intertwined goals in its cooperation activities: quality growth and the eradication of global poverty.
Whenever Jica refers to quality, it means inclusive, sustainable, and resilient. To realise quality growth, Jica focuses its assistance on the development of human resources as well as socio-economic infrastructure. As the world’s largest bilateral aid agency, Jica works in over 150 countries and regions. In fiscal 2015, technical cooperation disbursements amounted to Yen 191.7bn ($US 1.67bn) and grant aid disbursements to Yen 111.7bn in grant aid for 154 projects. Commitment for ODA loans totalled Yen 2.074 trillion for 71 projects.
World leaders adopted the Sustainable Development Goals (SDGs) in September 2015, with a pledge that no-one is left behind, as a new global agenda following the Millennium Development Goals.
Quality infrastructure
On May 21 2015, Japan’s prime minister Mr Shinzo Abe announced the “Partnership for Quality Infrastructure” initiative and committed to provide approximately $US 110bn for quality infrastructure in Asia over the next five years by making full use of Japanese economic cooperation instruments as well as other multilateral sources such as the Asian Development Bank.
In line with the core principles of SDGs, which are people and prosperity, and the initiative by the Japanese Government, Jica is promoting quality growth and the development of quality infrastructure.
What is the definition of quality infrastructure? The Japanese Government defines it as: economic (lowering the life-cycle cost), safe, environmentally and socially sound, and conducive to the local society and economy.
Jica further subscribes to four principles in the following order of priority:
- it must be effective for the development of the partner country
- it must have a positive influence on the bilateral relationship with the partner country
- it must promote investment by Japanese firms to the partner country, thereby contributing to Japan’s national economy, and
- it must not have a negative effect on Jica’s financial condition.
These principles may sound obvious, but the intention is to clarify what should come first: make aid work better for the development of partner countries.
Jica considers railway development as a prime example of how the concept of quality infrastructure should be applied.
On the other hand, railway development faces numerous obstacles. It generally requires large-scale capital investment compared with other transport modes and takes a significant amount of time from project identification to completion. Social and environmental considerations in relation to land acquisition and resettlement can pose serious concerns.
Furthermore, advanced railway systems require the appropriate human resources and institutional frameworks for safe, efficient, and sustainable operation. Ensuring cost recovery in a country where railway tariffs are politically set at a low level is also a common challenge.
To help overcome such difficulties, Jica seeks various opportunities to intervene by making use of its numerous support schemes from the early stage of the project cycle, including the formulation of master plans and conducting feasibility studies.
In the implementation stage, Jica not only makes its loans available for infrastructure development but also helps nurture human resources and assists with institutional development in partner countries. To do this, Jica, in partnership with Japanese railways, dispatches experts with ample operational experience. For example, in Vietnam Jica supported the establishment of an operation and maintenance company and increased the capacity of the regulatory agency for metro development in Hanoi and Ho Chi Minh City, and in Myanmar it improved track maintenance capacity as well as the level of railway service and safety.
Once commercial operations start, responsibility for operations and maintenance should be borne by our partner countries. However, Jica does not hesitate in offering much-needed follow-up support to partner countries.
Fiscal 2015, which ended in March 2016, was an epoch-making year for Jica’s railway development operations. Of the total commitment of Yen 2.0745 trillion in ODA loans, which was an all-time high, the transport sector accounted for Yen 994.1bn (48%) with Yen 597.2bn (29%) for railways including projects in the Philippines, Vietnam, and India. These numbers clearly point to the significance of the railway subsector reflecting the global and national initiatives to promote quality infrastructure.
Japanese ODA loans are provided basically on an untied basis with procurement open to international competitive bidding. Jica also provides tied loans known as Special Terms for Economic Partnership (Step) for projects in which utilisation of Japanese technologies and/or equipment are substantially required.
Given the huge new commitments for railway investment, including those where Step applied, the key challenge is the capacity of the Japanese railway industry, which is not necessarily catching up with the rapid increase in global opportunities. Moreover, some Japanese railway manufacturers are not familiar with doing business overseas and meeting international railway standards, though they have abundant experience in Japan.
The good news is that Japan’s cooperation in high-speed rail in India has made significant progress. Based on a Japan-India joint statement in May 2013, Jica and India’s Ministry of Railways conducted a joint feasibility study for the 505km Mumbai - Ahmedabad high-speed rail corridor project (MAHSR).
Following completion of the study, India’s prime minister Mr Narendra Modi decided in December 2015 to introduce the Shinkansen system in India and a memorandum endorsing the decision was signed between the two governments.
It was further agreed that Japan would provide a comprehensive assistance package consisting of concessional ODA loans, human resources development, and transfer of high-speed rail technologies. Following this important decision, Jica is currently assisting the Ministry of Railways in preparing the technical standards and regulations, the pre-requisite for India to introduce its first high-speed railway.
On November 11 2016, the heads of the two governments met again and said they would make all necessary efforts to implement MAHSR.
Looking to the future, Jica will continue to promote the development of railways in Asia and beyond, under the principle of putting partner countries first, making full use of Japanese knowledge and technologies, and strengthening partnerships with private communities and other development partners, with the vision of inclusive and dynamic development.
The views expressed in this article are the author’s own and do not necessarily reflect the views of Jica or other organisations referenced.
