14 January 2020

JTTRI International Seminar on Railway and Area
Development in Thailand
一般財団法人運輸総合研究所
タイにおける鉄道整備と沿線開発に関する国際セミナー

Railway and Area Development
Masai MUTO, Dr.
Japan Transport and Tourism Research InstituteSenior Research Fellow
運輸総合研究所 主任研究員

武藤 雅威(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

1

Profile
Masai MUTO
1989

1989
2001
2005
2013

M.Eng., Department of Civil Engineering, Tokyo
University of Science
R&D of Superconducting Maglev Train System,
Railway Technical Research Institute
D.Eng., Department of Civil Engineering, Tokyo
University of Science
Laboratory Head of Transport Planning,
Railway Technical Research Institute
General Manager, Strategic Research Division
Railway Technical Research Institute2010-2019 Part-Time Lecturer, Keio University
2013-2018 Visiting Professor, Tokyo University of Science

2019

JTTRI, Senior Research Fellow(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 20202

Contents
Introduction: Objectives and Directions of the Seminar
Chapter 1: Challenges in Urban Railway Development

Chapter 2: Considerations for Railway Development
2.1 Collaboration Between Railways and Area Development
2.2 Securing Financial Resources : Development-Based
Value Capture
2.3 Providing a High-Quality Railway System
2.4 Integration of Railway Development with Social
Infrastructure
2.5 Creating a sustainable urban railway system
Chapter 3: Toward Responding to Urban Transport Issues
JTTRI Future Prospect(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 20203

Introduction(1) Objectives• In order to solve problems such as serious traffic congestion
caused by rapid population growth ASEAN cities, integrationof railway and area development will be proposed based on
the local conditions in each cities.
This presentation is one of the research outcomes from:“Research Group on Railway and Area Development"
sponsored by JTTRI• Dr. Shigeru Morichi, Professor Emeritus, GRIPS, as a director of thisresearch group• Collaboration with 18 experts from academic, public and private sectors(2) Directions• Utilizing Japanese expertize and JTTRI long-accumulated
know-how• Case study in Hanoi, Bangkok, Jakarta, and Manila.
(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

4

Chapter 1: Challenges in Urban Railway Development
Four case studies◼ Hanoi Metro Line 2 (Phase3)

https://vietnamfinance.vn/tap-doan-sumitommo-muon-thuc-nhanh-du-an-dothi-thong-minh-nhat-tan-noi-bai-20180303205654052.htm◼ Jakarta MRT North-South Line
(Phase2)

https://news.detik.com/berita/d-4491696/pagi-ini-mrt-jakarta-mulai-berbayar◼ Bangkok MRT Orange Linehttps://www.mrta-orangelineeast.com/en/train◼ Metro Manila Subway Line 9(Mega Manila Subway)

You Tube : FILIPINO PROUD CHANNEL(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 20205

Hanoi Metro Line 2 (Phase3)

Hanoi Metro
Route 2 (Phase3)

5km(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

6

Bangkok MRT Orange Line
Dark red line
Purple line (opening)

Dark green line
(mostly opening)

Pink line (monorail)

Light red line

Orangeline

Blue line(opening)

Light Green Line
(opening)

Yellow line
(monorail)

5km
Purple line
(south)(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 20207

Jakarta MRT North-South Line (Phase2)
MRT North-SouthLine (Phase2)

MRT East-West LineMRT North-South Line
(Phase1, Opening)
2km(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

8

Metro Manila Subway Line 9

MRT7

LRT1

LRT2

MRT3

2km

Metro Manila
SubwayPNR North–South
Commuter Railway(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 20209

Challenge 1: Collaboration Between
Railways and Area Development
In order to cope with the rapid population increase andrapid urbanization, many housing required. To provide
accessibility to those housing, railway development to the
new town becomes one of the social issues.
• Prevention of urban sprawl development by private-sector-led
PPP (Hanoi)• Local community development plan have not been wellestablished (Hanoi, Manila)• No coordination between Railway PPP and TOD (Jakarta, Manila)• Concrete policy and procedure for land readjustment fordevelopment are not established. (Hanoi, Bangkok)

Further discussion in 2.1(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202010

Challenge 2: Securing Financial Resources
for Railway Development
Due to government financial constraint, recent urban
railway investments are usually relying too much on PPP.
• Due to limitation in tax-based budget, measures to utilize private
funds are under consideration in the case of Jakarta• Property tax system is not well-functioning (Bangkok, Jakarta,
Manila)• The suitable role for the private and the government in PPP is notclearly determined (Hanoi, Bangkok)

Further discussion in 2.2(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202011

Challenge 3: Providing a High-Quality
Railway System
The system of the railway which has been introduced does
not meet the user demand• Formulation of integrated railway and area development masterplan (Hanoi)• Overlapping route plans (Jakarta)• Heavy Congestion in Low-capacity MRT3 (Manila)• No organization to supervise multiple projects, including LRTs
and subway (Manila)

Further discussion in 2.3(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

12

Challenge 4: Integration of Railway

Development with Social Infrastructure
The required railway-related infrastructures, such as station
plaza, are not in consideration• Infrastructure investment plans from the government and theprivate investors are independently developed withoutcoordination (Manila)• The construction of rail (LRT1, MRT3, MRT7) and bus transfer
terminals at North Avenue is delayed due to legal conflict (Manila)

Further discussion in 2.4(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202013

Challenge 5: Creating a Sustainable Urban
Railway System
Loss and bankruptcy of railway companies are one of themost common issues in Asian Countries• There are many cases of PPP failure in Asian urban railway
projects.
• Lack of expertise in railway operations

Further discussion in 2.5(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202014

Chapter 2 Examination Items for Railway
Development
2.1 Collaboration Between Railways and Area
Development

2.2 Securing Financial Resources for Railway
Development
2.3 Providing a High-Quality Railway System
2.4 Integration of Railway Development withSocial Infrastructure
2.5 Creating a Sustainable Urban Railway
System(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202015

2.1 Collaboration Between Railways and Area
Development
Railway-Oriented High-Density Urban Development
The Tokyo metropolitan is developed by extend DID area tosuburban along the railway lines
Ibaraki
Saitama

Tokyo

Chiba

Kanagawa

Railway network
DID
50km from the city center

16
DIDs: densely populated areas,
Defined by an area of density of 4,000 people/㎢ or more, or a basic unit blocks with population of 5,000 or more(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

TOD
TOD (Transit Oriented Development) = Public
Transportation-Oriented Developments
Urban development which aims to promote public transit, not to increaseautomobile dependency

Tama-Center St.

Tama New Town
(32km from the Tokyo CBD)
(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202017

Example of TOD in JapanTOD along Den-En-Toshi (Garden City) Line:
Integrated railway (Den-En-Toshi Line) and land development (with land
readjustment program), taken by only one developer, Tokyu Railway.
• Total area  5,000ha, Population  620,000 (March 2017)• The largest private land development project in Japan
ShibuyaTokyo CBD

1st BlockMiyazakidai

2nd BlockTama-plaza

Miyamaedaira
Saginuma

Azamino3rd BlockAobadai

4th Block

Nagatsuda

Tsukushino
Tsukimino
Chuo-rinkan

Kajigaya

Eda

IchigaoFujiaoka

Tana

Suzukakedai
Minami-Machida
Grandberry Parkhttps://www.tokyu.co.jp/company/business/urban_development/denentoshi/
https://www.tokyu-cnst.co.jp/company/brandmessage.html

History of development
1953 Development plan announced
1963 Construction of the Den-En-Toshi Linebegins.
1966 Mizonoguchi and Nagatsuda section
started operation
1979 Through operation to Shibuya
1984 Opening of all sections (until Chuorinkan st.)2006 Completion of land readjustment program(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

Den-En-Toshi Line, near Aobadai Station, 1965
One year before opening
Ichigao st.

Aobadai st.

Fujigaoka st.

(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

Image from The Geospatial
Information Authority of JapanDen-En-Toshi Line, near Aobadai Station, 2005
40th years after opening
Ichigao st.

Aobadai st.

Fujigaoka st.

(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

Image from The Geospatial
Information Authority of Japan

Number of Users in Den-En-Toshi Line
Kajigaya st. - Mizonoguchi st. Section

Based on the urban
transportation annual report

600

Daily Average Passenger

400
300
200
100

0

1966(1)
1967(2)1968(3)1969(4)1970(5)1971(6)
1972(7)
1973(8)1974(9)1975(10)1976(11)1977(12)1978(13)1979(14)1980(15)1981(16)1982(17)
1983(18)
1984(19)
1985(20)1986(21)
1987(22)
1988(23)
1989(24)
1990(25)
1991(26)
1992(27)
1993(28)
1994(29)
1995(30)
1996(31)1997(32)
1998(33)
1999(34)
2000(35)
2001(36)
2002(37)
2003(38)
2004(39)
2005(40)

Number of passenger (1,000)

500

Year (years since opening)

OimachiChuo-rinkan(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

1984
Ext.

1976
Ext.

Tsukimino

Tsukushino

TOD
Area

Nagatsuda

KajigayaMizonokuchi

CBD

Futakotamagawa

Tokyo

1972
Ext.

1968
Ext.

Suzukakedai

1966
First section

Shibuya21

Land Prices Increase along Den-En-Toshi Line
Price Bubble
Yen/m2

1,000,000

×7.9

800,000
600,000

Changes in residential land
prices around stations

400,000

200,000
0

1970

1980

1990

2000

Miyamaedaira

KajigayaYear

Miyazakidai
SaginumaTama-plaza
AzaminoEda

Tsukimino
Chuo-rinkan

Suzukakedai

Minami-machida

Price Bubble
1,000,000

Yen/m2

Aobadai Fujiaoka Ichigao
Nagatsuda
Tana
Tsukushino

800,000

×8.5

600,000
400,000
200,000
0

1970
Based on the public assessed value frome MLIT
(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

1980

1990
Year

2000

22

Shares of railway business and real estate businessProfit from railway and real estate business of the Tokyu Railway
As railway and land development along railway are progressing, profit fromthe railway and real estate industries are also increasing.
Unit: 100 million yen/year

Den-En-Toshi Line:
Full line operation in1984
1.00 in1980

Source: Annual
Railway Statistics
ReportRail BusinessProfitReal EstateBusiness
ProfitRail BusinessProfit Growth(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

Real Estate BusinessProfit Growth23

Background of successful TOD along Den-En-Toshi Line
Residential area development along railway line →Increase in railway demand → Increase in land price• During the high-economic growth period in Japan

Rising in income level, Widespread of housing loan systems (frompublic financial institution)• Strong promotion of urban development plans
Railway company took initiatives in land readjustment program

Strategically Promoting Business through Unified Brand Concepts
Daily life support and service business for local residents

Mr. Keita GOTO

24
(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

2.1 Collaboration Between Railways and Area
Development◆ Points to be considered in this section• Residential area along railway line can be
developed by,•

Implementing land readjustment program•

With the initiative from railway company• As a result,•Land price rose•

Railway demand increase• This can be one of the a good examples of the
Collaboration Between Railways and Area
Development(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202025

2.2 Securing Financial Resources for Railway Development
Stages in financing from railway construction to longterm management
Railway opening

Stage 1

Stage 2

Stage 3

Stage 4

Facility construction

By utilizing facilities
Railway operation

Railway Business
Promotion

Sustainable Business(when Depreciation)(when planning forbusinessdiversification)(when Financing andConstruction)

Government Fiscal
Budget (subsidies)for infrastructure

Low-interest
financing(ODA Loan, etc.)
Private capital (PPP)

Government Fiscal
Budget (subsidies)for O&M(when expanding thescale of business)

Farebox Revenue

Development-based Land Value
Capture (LVC)(Financing from Railway Line Development)

Tax andburdenOther Business Revenues(real estate revenues, etc.)(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202026

Development-based Land Value Capture
Development-Based Land Value Capture (LVC)
The return of the profitability that will be obtained, or
has been obtained by development along railway lines
to the railway business(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202027

Development-Based LVC Scheme(1) Tax-Based Scheme
SchemeContents

ExamplesTaxes impose on the value of a land or
building. These taxes should be increase
based on the development.

(in Japan) Fixed Asset Tax,
City Planning Tax, Real
Estate Income Tax

User Fee /Beneficiary
ChargeTaxes and burdens imposed in advance by
central/local government to property
owners who will benefit directly frompublic investment

Beneficiary
Charge in Midōsuji Line,
Minatomirai 21 Line (Japan)
Business Rate Supplement(UK)
Development Cost Charge(Canada)Impact Fee (USA)Financial
MeasuresthroughFuture Tax
Increment

Development is funded by municipal/local
government loans/bonds. Loans/bonds will
be paid by the future increases in tax
revenues, such as property tax.

Tax Increment Financing(TIF) (USA)Land &
Property
Tax

Blue: will be further discussed
Based on Suzuki, H., Murakami, J., Hong, Y. H., & Tamayose, B. (2015). Financing transit-oriented
development with land values: Adapting land value capture in developing countries. The World Bank.
(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202028

User fee (1)Beneficiary Payments Scheme, JapanA part of Minato Mirai 21 Line construction cost was procured
as a payment from large-scale developers along the line
Minato Mirai Line Investment Cost
Breakdown

Minato Mirai 21 Line

Capital (Mainly fromlocal governments)

27 billion ¥• Construction started in 1992
• opened in 2004
• 4.1km, 6 stations (all underground)

Beneficiary Payments

74 billion ¥Redevelopment from shipyard andcontainer yard

Japan Railway
Construction, Transport
and Technology Agency

129 billion ¥Loans and Borrowings

27 billion ¥Total

257 billion ¥(Source: Yokohama City)

Developers: Mitsubishi Estate, Mitsubishi
Heavy Industries, Yokohama City, Urban
Renaissance Agency (UR), etc.

Source: https://www.mm21railway.co.jp/info/route_map.html(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

User fee (2)Business Rate Supplement (London, UK)
To support the construction of The Crossrail, the Greater London
Authority levy the additional business rate (property tax) for nonresidential (commercial) property rateable value above £70,000
with additional of 2 pences per pound (2%) of rateable value.
• 2008 Crossrail Act enacted, 2009 Business Rates Supplement Act enacted• Crossrail Total budget of £17.6 billion ($23.1 billion)• £6.6 billion (¥870 billion) were raised through Business Rate Supplement
Crossrail (Elizabeth line from 2021)

Shenfield- 118km, 41stations- Test run scheduled in 2020

Abbey wood
Reading

London Heathrow Airport
https://www.bbc.com/news/uk-england-london-48054789, 26 April 2019https://www.london.gov.uk/what-we-do/business-and-economy/promoting-london/paying-crossrail-business-rate-supplement
http://www.crossrail.co.uk/(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202030

User fee (3)Development Cost Charge (DCC) (Vancouver, Canada)
In any new development, municipalities and regional districts levy
DCC on private developers. DCC are then collected as reserve
funds for the future infrastructure investments (public transportation
included).
TransLink (The South Coast British Columbia Transportation Authority)• A special corporation that plans, procures funding, operates, and manages public
transportation• Supervise buses, ferries, urban railways, and intercity railway operators• Have taxation right (issued $4 million of bonds in 2018)
Development type
Detached houses(one household)
Detached houses(two households)
Apartment
OfficeApplicable date and rate
2020/1/15

2021/1/1$2,100/unit$2,975/unit$1,900/unit$2,470/unit$1,200/unit$1.00/ft2$1,545/unit$1.00/ft2

Based on Miyamoto and Tsuchiya: 131st JTTRI Colloquium “Urban Railway and Area Development in North America," 2019.7.31(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202031

Financial Measures through Future Tax
Increment
Tax Increment Financing (TIF) (USA)Due to the effects of development along railway lines and stations,tax revenue, such as property tax, is expected to increase.
Infrastructure investment funding is procured by borrowing the
expected future increases in tax revenues into financial resources.
Denver Union Station Redevelopment• By setting up TIF area, charges can be collected from the increase in propertytax (new development), sales tax, and bed tax• TIFIA (Transportation Infrastructure Finance and Innovation Act) loan provides
approximately 30% ($145.0 6M) of project cost, then repaid by above charges.
Denver Union Station
Main station of thetranscontinental railway,
built in 1856

Based on: 1. https://www.transportation.gov/tifia/financed-projects/denver-union-station
2. Miyamoto and Tsuchiya: 131st JTTRI Colloquium “Urban Railway and Area Development inNorth America,2019.7.31(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202032

Development-Based LVC Scheme(2) Development-Based Scheme
MethodContents

ExamplesLand sale/leasing

Sale or rental of land or its development rights at
the risen value after the public investment or
regulatory changes

Rail Plus Property(R+P) program(Hong Kong)

Air right
sale

Governments sell development rights extended
beyond the limits specified in land
use regulations (e.g., FAR) to raise funds
to finance public infrastructure and services.

Tokyo Station
Rehabilitation (JP)TDR (USA)
CePAC (Brazilian)Land
Readjustme
nt

Through land readjustment, landowners loose
some of their land in exchange of the newdevelopment. Some acquired lands are sold tofinance public infrastructure.

Den-En-Toshi Line,
Tsukuba Express
Line (JP)Landowners and developers establish a
Comprehen collaboration to consolidate fragmented lands tosive Urban
create roads and public spaces. Local government
Redevelopm revises land-use regulations in redeveloped area,entsuch as FAR bonus, or provide funding for publicprojects

Shiodome
Redevelopment,
Toranomon
redevelopment (JP)King Cross Station
Redevelopment (UK)

FAR (Floor area ratio): Ratio of a building’s total floor area to the size ofthe land on which it is built

Blue: will be further
discussed

Based on Suzuki, H., Murakami, J., Hong, Y. H., & Tamayose, B. (2015). Financing transit-oriented development with land
values: Adapting land value capture in developing countries. The World Bank.
(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202033

Air Right Sale (1)Hudson Yard Development (New York, USA)
➢ Redevelopment project in railyard area (146ha)➢ Other incentives to private developers➢ Subway no.7 extension➢ Provision of new public spaces
Air right sales: Transferrable Development Right (TDR)
Yellow: Eastern Rail Yards TDR
Air right purchase from railyard
Based on TDR, Up to 33.0 FAR can betransferred (mainly commercial area)
Green: District Improvement Bonus FAR
Up to 8.0 FAR (800%) can be purchased$100 per ft2 at the beginning of 2005,
Increase by inflation, current price = $134.63

Blue: Baseline FAR
Based on Miyamoto and Tsuchiya: 131st JTTRI Colloquium “Urban Railway and Area Development in North America,2019.7.31(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202034

Air Right Sale (2)CePAC:Certificados de Potencial Adicional de Construção
(Certificates of Additional Construction Potential) (SaoPaulo and other cities, Brazil)
Urban development funding procured through the sale for air rights
using the FAR transfer system.
• Baseline FAR in Sao Paolo = 100-200%• If the landowner wishes to construct the building beyond the baseline
FAR, the certificate for an additional building is required.
• The certificate is traded at the market price at the Sao Paulo Stock
Exchange• The certificate sales goes to Urban Development FundÁgua Espraiada area
• Purchase at $1,181 million (February 2013)• Allocated for transportation infrastructuresdevelopment, including monorails
H.Suzuki, et al.; FINANCING TRANSIT-ORIENTED DEVELOPMENT WITH LAND VALUES
https://parcourresearch.com/case-studies/ouc-agua-espraiada/
Julie Kim;CePACs and Their Value Capture Viability in the U.S. for Infrastructure Funding,Lincoln Institute of Land Policy Working Paper WP18JK1,2018.9(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202035

Securing railway ROW through Land
Readjustment
Before
Mr. B

Mr. A

Mr. D

Readjust based on thedata from the MLIT

Mr. A’s remaining
after readjustment

After
Land
for
sale

Mr. B

Mr. C

Mr. A Mr. E
Public space (parks, roads, etc.)
Reserved land (railway land, etc.)

Mr. D
STATIONPark

Fund forrailway
investment

Mr. A’s original land

readjust

Mr. C

Mr. E

Railway land

Although the amount of land decreases after thereadjustment, landowners have no loss because theirland value will rises from better accessibility(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202036

Land Readjustment
Tsukuba Express and Area Development (along Tokyo
Pref. - Ibaraki Pref., Japan)➢ Integrated planning and implementation of the railway
development and land readjustment program through legislation➢ In readjustment zone, some land has been acquired in advanceso that the land for railway construction can be easily readjusted
Act on Special Measures concerning Comprehensive Advancement of Housing
Development and Railway Construction in Metropolitan Areas (1989)• Urban development plan based on land readjustment program by public entities(Urban Renaissance Agency, Municipalities along the railway line)• Increased in population and rail users(rail user, 2006: 195k/day, 2015: 340k/day)
Tsukuba Express (Metropolitan Intercity Railway Company)• Joint capital from local governments along
railway lines• 58.3km, 20 stations• Opening 2005

37
(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

Comprehensive Urban Redevelopment (1)Toranomon Redevelopment (Tokyo, Japan)➢ Incentive to private developers from FAR bonus➢ Local government provides the new subway station, as well as the
shuttle BRT to Olympic Games venues➢ Local disaster prevention functions (support for those who havedifficulty returning home, independent-distributed energy systems)
Redevelopment Summary
•
•
•

•

Maximum FAR bonus of 1990%
Planned as an international businesscenterPrivate investment of about 400
billion yen
Construction of “Toranomon Hills
Station” (Completed in June 2020)

Toranomon Hills(Jun. 2014 opened)

Toranomon Hills
Business Tower

Toranomon Hills
Residential Tower
Toranomon Hills
Station Tower

New Station"Toranomon Hills"

Source: Mori Building

38(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

Comprehensive Urban Redevelopment (2)King’s Cross Station Redevelopment (London, UK)A joint development of a rail operator, LCR (London andContinental Railways) and other private companies• Railway terminal stations redevelopment project in a conjunction with theconstruction of the High Speed 1 (HS1) (1996)• LCR and DHL (logistics company) own the land. LCR is granted the realestate development around the station by the government.
• LCR, DHL and other developers jointly established the development
company (2008)• Redevelopment creates 22,100 jobs and 2,000 residents• From railway operators, LCR has reorganized into property
Granary Squaredevelopment company

St. Pancras Station(next to King’s Cross)Eurostar terminal station
Source: 1. H.Suzuki, et al.; FINANCING TRANSIT-ORIENTED DEVELOPMENT WITH LAND VALUES
2. https://www.kingscross.co.uk/(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202039

2.2 Securing Financial Resources for Railway
Development◆ Points to be considered in this section• In railway business, there is a long gap between
investment period and recovery period. In many cases,
this gap could be longer than expected.
• To compensate for this, central and local government
need to support railway development by grants, subsidies,and non-interest loans.
• From the viewpoint of the central and local government,
the benefits are• Increase in the property tax income due to increase in land price• Accessibility improvement for local residents.

• From the examples of LVC, LVC has been proven to be aneffective method to raise funding for the investment
during the early stage of railway development.
(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202040

2.3 Providing a High-Quality Railway System
Characteristics and Functions of Urban Railways in theTokyo Metropolitan Area (TMA)➢Availability of railway master plan at the metropolitan
area level
Urban railway master plan in the TMA➢Availability of mass transit systems with variety infunctions
High-speed rail, express and local trains, subways, monorails, AGT, etc.

➢Through operation
Direct service between suburban rail and urban subway➢High-capacity loop line
Circulating terminal stations at the edge of urban centers➢Cooperation between railways and buses
Bus as a feeder mode(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

41

TMA urban railway network
CTPP No. 18 (2000)
2500

Year at formulation of TMA
Urban Railway Master Plan

(km)

2000

1500

CTPP: Council of Transport Policy PlanJNR,JR

PrivateJNR,JR (quadruple track)

Tokyo Metro
Private (quadruple track)(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

42

CTPP No. 18: Highlights (1)Setting policy issues

Alleviation of in-train congestion

Average congestion rate (%)

Targeted peak-hour congestion rate of 150% or less for major sections, and180% or less for other lines

177
174
171
168
165
162
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

YEAR(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

43

CTPP No. 18: Highlights (2)Investment Priority
A1, A2, and B priority settings

Priority evaluation criteria• Demand trend• Socio-economic impact• Cost Effectiveness• Financing (revenue andexpenditure)• Vision of implementing body

A1: 280km

A2: 169km
Overall Score

B: 203km[Setting Investment Priority: Target Year = 2015]
A1: Routes that are appropriate to be opened by the target year
In 2015, about 80% (223km) of A1 was opened
A2: Routes that are appropriate to start construction by the target year
B : Routes to be considered (after considering the needs and investment method)(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

44

CTPP No. 18: Highlights (3)Legislation to support CTPP No. 18
Act on Enhancement of Convenience of Urban Railways,
etc. (2005)
Law enacted to support through operation between two (or more) lines
Kanagawa Pref.
Sotetsu

Railway Operator

Sotetsu
and JR(existing railway company)
Infrastructure usage fee(based on the benefit)

Construct a new link

JR-Eastto Tokyo CBD

Through Operation

Verticalseparation

Railway Investment Entity JTRR

Sotetsu/JR through service line
opened in November 2019

(public entity)

Loan
Repay

Central
Gov.
1/3

Local
Gov.
1/3

Loans
1/3

JTRR: Japan Railway Construction, Transport and Technology Agency(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202045

Hierarchical Urban Railway Network in Tokyo
Type of railway

Shinkansen (high-speed railway)
Inter-city railway (JR)Express train (private railway)
Local train (private railway)
SubwayMonorail/AGT

Distance
betweenstations
30 - 50 km

Operating speed

5 - 6 km50 - 60 km /h

1 - 2 km
0.5 - 1 km
0.5 - 1 km

40 - 45 km / h
30 - 35 km / h
20 - 30 km / h

Number of passengers

120 - 130 km /h

Intercity railway
Express train

Transport Volume
HSR
Distance
Urban railways
Terminal

Local train
CBD

Monorail/AGT

Metropolitan area(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

46

Mass Transit System by Capacity-Speed Chart(10,000 people/hr/direction)

Maximum Capacity

Based on the document from MLIT

5

Subway4
2

Monorail, AGT

1

Tram

LRT, BRT

1020
Speed (km/h)

Bus
30

40

Mass transit systems should be determined based on the
future demand and land constraint (location)(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

47

Tokyo Metro Tōzai (East-West) Line (30.8 km)

USING EXACTLYSAME SCALE

Suwinthawong

Bangkok MRT Orange Line (39.6km)
Min Buri

Taling Chan
Thailand
CulturalCentre(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

Commuter Line:High Capacity with Express Service
10-car train
Inbound peak hour headway:
7:00-7:59 = 19 trains

Tokyo Metro Tōzai Line (East Section)
T23

High capacity operation with rapid service

T9

Underground section
T16

T17

T18

T19

Kiba

ToyochoMinamiSunamachi

NishiKasai

Kasai

Urayasu

MinamiGyotoku

T20

T21

T22

T23

NishiFunabashi

T15

BarakiNakayama

T14

MyodenT13

Gyotoku

T12

MonzenNakacho

T9

T11

Kayabacho

T23

T10

Nihonbashi

Nakano20.1kmT9

Otemachi

T1

Ground section

Chiba Prefecture

Tokyo CBD

TXX

With sidetrack(for overtaking)Rapid Service(23~26min.)Commuter Rapid(29~36min.)Local(31~43min.)Based on the urban transportation
annual report 2013

Sectional volume(round trip: thousandpeople/day)

527

628

656

656

613

551

518

462

399

361

336

311

Highest congested section in the TMA(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

287

280

49

Through Operation
As tracks from different railway company are connected, trainsfrom any company can serve through another company's track
without stopping
Kotake◆Advantages
Wako-shi
Mukaihara[For users]① Tobu・ Transfer is no required③ Tokyo・ Faster travel to/from CBD
Metro
Nerima[For the operator]② Seibu
Ikebukuro・ Increase in demand・ Smaller transfer stations(less platform)
・ Encourage development
along railway lines
・ Train depots can be built
ShibuyaThrough service between
in less populated area
◆Conditions
・ Gauge must be match・ Signaling, Train set must
be compatible

five railway companies
MotomachiChukagai⑤ MinatoMirai(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

Yokohama④ Tokyu50

Through Operation in Tokyo
From various railway companies in Tokyo
Creating integrated railway network
Kuki

ShinMatsudo Toyo High Speed Railway

Shin Keisei Line

Chiba
Chiba Chuo
Chuo

Km Through operation length in TMA
1000
878
900 Data from MLIT
800
691
700
600
532
500
414
400
300
200 155
100

No Transfer

0Suburban Rail Subway Suburban Rail1970

(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

1980

1990

2000

2010

51

Yamanote Line:
Loop Line Connecting Other Rail Terminals
Morning peak hour※ conditionin Yamanote Line
⚫ Design Capacity
11 cars × 23 trains = 37,444
person/hr⚫ Actual Volume
59,900 people/hr (160%congestion rate)※ 7:45 to 8:45 between Shin-Okubo andShinjuku(FY2017 data)
5 km•

Railway development by private railway company
is restricted inside the loop of Yamanote Line•

Travel inside the loop by through service fromsuburban rails to subway lines
HSR terminals in CBD•

Forming Hierarchical Urban Railway Network(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202052

Cooperation between railways and buses• Bus, taxi, private car and bicycle are important feeder
services for urban railways.
• After the opening of the railway, trunk line bus which runs
parallel to the railway should be converted to feeder bus.
• In Japan, in the past, there was an extensive investment inbus terminal. Therefore, there is an incentive to re-route thebus network(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202053

2.3 Providing a High-Quality Railway System◆Points to be considered in this section• To improve efficiency in transportation, not only
urban railways, but the combination of different
types of mass transit system is suggested➢Rail systems with sufficient transportation
capacity for major corridors➢Express operation for faster travel from major
stations in suburban area
➢BRT/LRT as a feeder➢Most of the CBD should be accessible by rail
network• Through operation between suburban rail and urban
rail has has advantages such as shortening of timeand area development benefit(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202054

2.4 Integration of Railway Development withSocial Infrastructure
Multi-business model of Japanese railway companies
Access to sightseeing spot
IC card businessResort development

Universities, schools,
research center,industrial park

Park & Ride

Amusement facilities

STATION

Hotel Business

Railwaybusiness

Shops in Station
Condominium

Urban
redevelopment

Utilize the space
under viaduct
New town development

Feeder(bus, tram)

Department stores, Offices

By promoting

CBD: Commercial and Entertainment
Suburb: University and Leisure facility

Weekday: Reverse direction trip
Weekend: More demand
55(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

Connection between railway station andsurrounding area
• As offices and commercial areas are developed around thestation, tunnels, overbridges and skyways should should beconsidered so that user can walk without crossing the road.
• In Japan, there are many underground shopping districts
connecting stations and surrounding commercial areas• Japanese railway companies earn a huge revenue from shopand restaurant rents inside the station.

(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

56

Station Plaza• The station square is designed not
only for feeder modes, but also fordevelopment around the station.

Sendai Station East Entrance
Station Plaza• In Japan, there is a design manual
for the station plaza. The design
must meet the future demand ofpedestrians, private cars, kiss & ride,buses, taxis, bicycles, etc.
• Railway companies and local
government share an investment
cost. Central government also
provide some subsidies. In somecases, railway operators anddevelopers bear all the costs.

(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202057

Park & Ride, Vehicle Sharing(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202058

Railroad Grade Separation• Grade separation is introduced to reduce road congestion andtraffic accidents• Rail elevation is easier and cheaper than elevating roads• In Japan, there is law stated that rail entity and road entity must
share the cost of grade separation. Central government also
provides subsidy.
[Continuous grade separation project cost sharing]
Rail entity shares the cost equal to the benefit (level crossing O&M cost reduction,
reduction in accident). The rest is the burden to road entity.

From homepage of Bureau of Construction, Tokyo Metropolitan Government(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202059

2.4 Integration of Railway Development withSocial Infrastructure◆Points to be considered in this section• For railway companies, there are opportunities
to expand their business in other sectors• Japanese railway companies earn a hugerevenue from shop and restaurant rents inside
the station.
• Station plaza is required for• Access space for feeder transport• Access to development around the station(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202060

2.5 Creating a Sustainable Urban Railway
SystemPublic transportation development in each development stages• With economic grows, the car ownership rate increases and the public transportation
usage rate decreases.
• At the right time, development in urban railways will reduce the share of automobile tothe desirable level, but beyond that time, it will be difficult to increase the share of
public transport to desirable level.
• Too early development of urban railway creates a risk of bankruptcy to railway
operator due to high initial cost and low fare setting from low income level.

• Too slow means the spread of low density land-use in suburban area by car-oriented
development, particularly using motorcycles.

(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

61

Example of Railway Development by PPP in
Government.
Asian Countries Notes: Public
corporation

EPC: Engineering, Procurement, Construction
O&M: Operation and MaintenanceM&E: Mechanical and Electrical

Project

SchemePrivate enterprise
EPC
Civil

Ownership
M&E
Civil

O&M

M&E
PUTRA

KL PUTRA

BOT

Bangkok Blue Line
Delhi
Airport Express

BOT

MRTA

BEM

BOT

DMRC

Kaohsiung MRT

BOTSeoul Subway 9

BEM

PUTRA
MRTA

BEM

DAMEPLDAMEPLDMRCDAMEPL

Local Govt.

KRTC

KRTC

Local Gov.

BTO

Local Govt.

Metro9Metro9Seoul DX line

BTO

CentralGovt.

Shinbundang
Railroad

Shinbundang
Railroad

Manila MRT3
Shanghai
Metro line 11
Taipei
MRT Xinyi Line

BLT

MRTC

PublicShanghai Shentong Metro

PublicDORTS

HCMC MRT 1

PublicMAUR

HURC

JKT MRT

PublicPT MRT Jakarta

PT MRT Jakarta

DOTC

KRTC
Local Govt.
KRNA
MRTC

Shanghai Shentong Metro
TRTC

DORTS

7 routes are financed by PPP, 4 routes are financed by government(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

62

Example of railway business by PPP in Asia
• Urban rail PPP projects in Asia: Many failure cases➢ Demand risk from low initial demand➢ Construction risks from rising of construction costs as well as
project delay➢ Poor risk management from railway operator• If there is no support from the government, return
period in railway business is too long to attract private
investor• PPP is one of the great options, but lesson learn fromfailure cases should be carefully examined.

(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

63

Economically Sustainable Fare Setting◆ Fare Regulations and Political Decisions• Political decision tends to set the fares too low• Fare setting should consider the total cost, which includes anappropriate profit in the total cost
◆ Fare Setting with The Consideration of Economic Growth• Price indexing system
Consumer Price Index (Overall Index)

140
120
100
80
60
40
20
0

100
80
60
40
20

0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018

JPY

Minimum Fares in Yamanote Line

JNR

Year

JR-EAST(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

64

Business-Class Commuter Car
Why don’t higher income people shift from car to rail?

JR-EAST Green Car

Fare =
Basic Fare + 3 to 10 USD
Seibu Laview(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202065

Towards Sustainable Urban Railway Management
Concept of Sustainable Railway
Management

Profit from farebox and area development

Reduce the burden
from dividend

Business Scale

For renovations

ProfitGovernment
subsidies
Infra. Maintenance Costs▲ Opening

Infra. Maintenance Costs

Period of increased infra. maintenance costs
For investment inother railway

Single-year
break-even

Profit period
Total cost
break-even

Operating period

To be minimized• Borrow from low-interest loan source• Operating cost reduction• Increase profit (demand creation and expansion in related business)• Efficient operation (infrastructure maintenance cost reduction)(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202066

2.5 Creating a Sustainable Urban Railway
System◆Points to be considered in this section• It is difficult to develop a transportation network with
only PPP as a main source of investment.
• Government support is essential for a smooth
progress of the project➢ Project coordination➢ Providing subsidies➢ Land use plan adjustment➢ Deregulation of development projects➢ Financial support to public infrastructuredevelopment• It is important to keep in mind that the railway is a
profitable business(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202067

Financial Support Measures(1) ODA Yen Loan
Main organizations: JICA (Japan International Cooperation Agency)
Application conditions: any developing countries
ExampleConditions

Construction of
Jakarta Mass
Rapid Transit
Project

STEP

Metro Manila
Subway Project

STEP

Dhaka Mass
Rapid Transit
Development
Project

UntiedOverview

Total
Loan

The construction of the first subway in Indonesia will
help the increasing demand for transportation, alleviatetraffic congestion, improve the investment environment,
and reduce environmental impact.

137.3
billion yen

The first subway in the Philippines developed torespond the increasing transportation demand andalleviate serious traffic congestion in the Metro Manila
area.

793.5
billion yen

Construction of mass rapid transit (MRT6 Line) in
Dhaka City to meet transportation demand in Dhaka
urban area

349.4
billion yen

STEP (Special Terms for Economic Partnership): Japanese supplier only
Untied: Can procure from any other countries

Loan rate (in general),ODA Yen Loans < ADB < IBRD (World Bank)(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

68

Financial Support Measures(2) Overseas Loan
Main organizations: JICA (Japan International Cooperation Agency)
Application conditions: any private enterprise in developing countries
ExampleOverview

The Project for
Improvement ofTerminal Building
at Palau
International
Airport

The project loan to a local corporation which includes
expansion, renovation, operation, and maintenance ofpassenger terminal building at Palau International Airport(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202069

Financial support measures(3) Overseas Investment
Main organizations: JBIC, JICA, JOIN
Application conditions: Investing institute is not the main investor
ExampleOverview

Investment

UK Intercity
Express
Programme(JBIC) A pound-based loan to ATEL, aconsortium of Hitachi, Axa UK and John Laing•Created to design, manufacture, and maintainthe train set•Vehicle leasing and maintenance services toEast Coast Main Line rail operators£860 million(114 billion
yen)

Suburbanrailway
operation in
Rio deJaneiro(JOIN) Joint investment by Mitsui, JR West andJOIN for suburban railway operations in Rio deJaneiro9.9 billion
yen

JBIC: Japan Bank for International Cooperation
JOIN: Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development

There are many financial support measures from Japan(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202070

Selected Subsidy Systems for Urban Railway
Development in Japan
SystemInformation

Regulations

Central Govt.
Subsidy

Local Govt.
Subsidy

Underground
Mass Rapid
Transit
Subsidy

Partial subsidies for a new line
construction costs as well as alarge-scale improvement/renovation
costs(Related
Instructions)

Maximum 35%

Maximum 35%

Airport Access
Railways
Subsidy

Partial subsidies for construction
and renovation of airport accessrailways as well as railways to new
town development(Related
Instructions)

18% (airport
access rail), 15%(new town
access rail)

Same as central
government

Urban railway
Service
Improvement
Subsidy

Subsidization of projects to improve
service in an existing urban railway

Urban railways,
etc.
Convenience
Improvement
Business Act

1/3

1/3

Social Capital
Development
Grant

Supporting the Development ofSocial Infrastructure by Local
Governments(Related
Instructions)

1/2 (after exclude
the burden of
railway operator)

1/2 (after exclude
the burden of
railway operator)

Promoting the construction ofMonorails and AGT lines

Law
Concerning thePromotion of
Urban Monorail
Development

1/2 of theinfrastructure
cost

The remaining
amount from
central govt.
subsidy shown in
the left

Infrastructure
Subsidy(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202071

Operation Support Measures
Through accumulate experience in high volume and highfrequency operation, the support to human resource
development can be provided.
• Taiwan High Speed Rail (2003-2004)
JR Central and JR West provided trainings
based on the experience and pastachievement of Shinkansen systems in Japan• India High Speed Rail (2016~)
Supporting the establishment of training
centers to High Speed Rail Corporation ofIndia as well as the formulation andimplementation of training programs.
• Hanoi Metro (2017~)
Tokyo Metro established a local
corporation for urban railway consulting.
(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

Data from MLIT

Data from MLIT

Japanese
Embassy at
Vietnam
Homepage72

Chapter 3: Toward Responding to Urban Transport
IssuesBangkok MRT Orange Line
Bangkok’s East-West Urban Railway (Phase 1 under construction, 39.6km)
Dark red line

Purple line (opening)

Dark green line
(mostly opening)

Pink line (monorail)

Yaek
Suwinthawong

Blue line(opening)

Light red line

Bang Khun Non

Orangeline
Light Green Line
(opening)

Phase2Phase1

Under procurement

Under construction

5km
Purple line
(south)(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

Yellow line
(monorail)73

MRT Orange Line: Current Progress◆ Total length 39.6km (30.6km underground tunnel), 30 stations
Phase1 (East Section) Thailand Cultural Center - Yaek Suwinthawong• Supervised by Mass Rapid Transit Authority of Thailand (MRTA):
All civil works investment from government fiscal budget• Cabinet approval in April 2016
• Total cost of about 110 billion baht (about 340 billion yen)
• Construction progress rate 51.33% (as of the end of November 2019)• Opened: 2023 (scheduled, some sections may operate first)
Phase2 (West section) Bang Khun Non - Thailand Cultural Center• January 2019: PPP Commission, SEPO, has approved PPP investment
plan for civil works (west section), M&E (whole line), O&M (whole line)• Under procurement process• Opened: 2025 (scheduled)
Reference: https://www.mrta-orangelineeast.com/en/home
https://www.mrta.co.th/en/projectelectrictrain/orangeline/
https://www.arayz.com/columns/tokusyu_201807/3/
https://www.bangkokpost.com/business/1627166/agency-oks-final-orange-line-rail
https://www.jri.co.jp/MediaLibrary/file/report/researchfocus/pdf/11006.pdf(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202074

Toward Responding to Urban Transport Issues◆ Current Status• Railway Investment → (mostly) Government Budget◆ Government Perspective• Typical O&M separated contract is PPP net-cost oriented, thus O&M
concessionaire bears the demand risks System whereby concessionaires operate their businessusing a certain income (e.g. fare income) as the source◆ Problems• Increasing in business risk makes it difficult to create a sustainable railway
business• To securing the profitability, the systematic promotion of development along
railway lines is in urgent needed• However, the current regulation and policy are still insufficient and theorganization in-charge has not been clearly decided◆ Countermeasure (proposal)• Implementation of development projects around stations in PPP (government
and private companies)• Securing public spaces, including station plaza and park & ride
• Implementing a railway-area development pilot project based on theJapanese model

Policy of deepening the examination(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020

75

JTTRI Future Prospect (DRAFT)JTTRI[The Morichi Committee "Research Group on Railway and Area Development”]
Research and development support for strategies and business schemes
Academic experts, MLIT, JICA, UR, JRTT, Railway Companies, etc.
ASEAN Transport Policies
A Support for the development of urban railways in ASEAN
Manila/Bangkok/Jakarta/Hanoi/Others
Consideration of policy support
measurements
MLIT, MOFA, METI, embassy of various
countries, etc.

Consideration of public financial
support measures
JICA, JOIN, JBIC, JRTT, NEXI, etc.
Support and cooperation

Support and cooperation

JTTRI ASEAN Office
Coordination with ASEAN countries through inter-governmental agreement, andsupport for the development of urban railway projects

Urban Railway Development and Related Companies
Trading companies, railway operators, consultants, construction company, etc.

Support for Urban Railway Development Projects in ASEAN(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 202076

Thank you for your attention(Example of developments from FAR sales around Tokyo Station)(C) Mr. MUTO Masai, Japan Transport and Tourism Research Institute, 2020