The Times:
Leo Lewis, Asia Business Correspondent
A global boom in infrastructure projects worth more than £200
billion has prompted Japan to launch its most expansive charm
offensive in the international game of railway diplomacy.
From Washington to Ho Chi Minh City, via Delhi and Dubai, Japan
has embarked on an unprecedented frenzy of salesmanship. Huge
delegations representing businesses and the Government have begun
circulating the world’s capitals pitching for any railway projects
where Japan thinks it stands a chance of winning the bid.
In its desperation to win, say analysts in Tokyo, Japan is
playing one of its favourite cards — huge overseas development aid
(ODA) and generously termed loans — with the tacit expectation that
those nations accepting them will “buy Japanese” when selecting
their train maker. Recent examples have included extending a $5
billion (£3 billion) loan to India for rail upgrades and making a
surprise offer to Moscow to help to finance the rebuilding of the
Trans-Siberian railway.
In India, particularly, the stakes are high. The recently
completed second- phase sections of the Delhi Metro are expected to
form the template for similar mass-transit networks in other large
cities in future.
Japan’s diplomatic gambit is not restricted to railways. The
Government last week offered cheap funding to electricity groups in
Australia and the US for the construction of clean-coal generators,
with the clear proviso that the technology and equipment used for
the projects be Japanese.
A spokesman for Kawasaki Heavy Industries (KHI), the
train-making conglomerate, agreed the number of projects financed
by ODA and by the Japan Bank for International Co-operation was
increasing. The ones funded by Japanese ODA, he said, were
particularly interesting because only Japanese companies are
invited to bid.
If Japan does not win these contracts now, its reputation as a
builder of high-speed trains may be destroyed, runs the official
logic in Tokyo. France and Germany have always been fierce rivals
but the field has also been joined by South Korea and China for
this latest round of massive project tenders.
With projects valued at a combined $100 billion, the Middle East
is viewed as potentially the next most lucrative battleground, as
the region’s oil states turn their attention away from the
combustion engine for public transport amid surging urban
populations. The first line of the Dubai Metro opens later this
year, while Saudi Arabia, Qatar, Abu Dhabi and others are looking
at building substantial rail networks to extend their existing
routes. Japanese companies have a strong foothold and are involved
in a number of monorail and commuter links. But China, already
emerging as a strong player in the region, has made its competitive
presence felt, winning the contract to build a monorail in
Mecca.
Meanwhile, the Japanese efforts are being stepped up. A 25-man
team, consisting of bureaucrats from the Ministry of Economy, Trade
and Industry (METI) and executives from KHI, Toshiba, Mitsubishi
Heavy Industries and Mitsui, recently returned to Tokyo from
Brazil, where they were touting Japan’s ability to build a $15
billion, 500km rail link between São Paulo and Rio. Earlier this
week, Yoshiyuki Kasai, the chairman of Central Japan Railway,
travelled to Washington to add his weight to company efforts to win
contracts to build a new high-speed network in America. If
successful, the pickings could be spectacular: the Obama
Administration recently promised a $13 billion investment in such a
network.
Central to Mr Kasai’s pitch was the promised speed of the
trains. In his case, the favoured machine would be the N700,
designed to start making the iconic Tokyo-Osaka run at 330km/h
later this year. Before those grand assurances were made, some had
begun to question whether Japanese bullet trains, despite their
reputation, would be fast enough to satisfy potential buyers. A
pace of 300km/h is emerging as the minimum requirement of nations
planning their first high-speed rail routes.
