Integrated Land Development

and Railway Operation

-Experiences in the Japanese passenger railway sector-

Senior Researcher
Fumio KUROSAKI, Ph.D.
Planning, Implementing, and Operating High Speed Railway (HSR) in Asia 15 Feb. 2018, ADBI, Tokyo
 Background of presentation

Characteristics of railway construction

1) External economy of railways
✓ Railway will increase the value of the land.
✓ Railway construction is effective to develop residential
areas and business districts.
2) Necessity of Integrated Development
✓ Stations should be planned in coordination with regional
planning such as bus stations and roads.
In history
The passenger railway sector in Japan has rich experiences
in integrated land development and railway construction.
 Outline of Presentation
Introduction :Railways in Japan (urban area)
Part 1: Railway development during rapid population increase
Part 2: Railway development during gradual population increase
(ten thousand)
Present
14,000 Part 2

12,000 Part 1

10,000

8,000

6,000

4,000

2,000

0
1990
1950
1955
1960
1965
1970
1975
1980
1985

1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060 3
Working Ages (15 - 64 years old) Other Ages 3
Introduction
Railways in Japan (urban area)

Station of JR East
Roads with few congestions 4
 Three Major Types of Railways
in Metropolitan Areas in Japan

1）JR Lines 2）Metros 3）Private Railways

5
 Urban Railways Systems in Japan
Metropolitan Areas e.g. Tokyo, Osaka

Short-distance Medium-distance Long-distance

Combined Utilization
+
Convenient bus services from/to stations

Competitiveness against Cars 6

Part 1
Railway development
during rapid population increase

1）JR Lines (ten thousand)

Part 1

2）Metros

3）Private Railways
Unique to Japan Transition of population in Japan

7
3）Private Railways

Integrated Development until 1970s

Background
✓ Road network was quite poor
✓ Expansion of urban rail network was required
✓ Land prices soared because of rapid urbanization
Urbanization progressed along
with population increase.
(ten thousand)

Private railway companies

expanded suburban rail network
along with land development.

8
 Kobayashi Ichizo model

Private railway company

Responsible for both projects

Railway Construction Land Development

Railway development during rapid population increase

Integrated Development
The company could earn from both businesses.
✓ Affiliated businesses cover a large share of the revenue to private urban railways.
9
1）JR Lines

Affiliated Businesses since JNR Reform

Tokyo Station

10
Shinjuku Station Shops in the Station
 Summary of Part 1

1) The population has increased rapidly especially in urban area

until the 1970s. By utilizing the external effects of the railways,
Japanese private railway companies were able to expand their
networks without relying on public revenue.

2) The private railway companies could earn revenues from both

railway businesses and land development.
(Business model is named “Kobayashi Ichizo model”)

3) JR companies have been following the similar business model

since JNR reform in 1987.
 Part 2
Railway development
during gradual population increase
Private railway company
(ten thousand) Present
Part 2
Excess financial burden

Railway Construction Land Development

Heavy costs and excess risk for the

private sector.

Transition of population in Japan 12

 Railway Construction Project
Tsukuba Express project
©MIR

Regional governments

Responsible for both projects

as executers of land
as shareholders
readjustment projects
project 1 project 2

Railway Construction Land Development

©MIR
©MIR

13
 Problems before the Law
 Inconsistency with regional development
✓ Regional development usually occurred after the railway line
started its operation.
✓ Inconsistency with regional development such as road
planning.

Traditional Problems

Railway Construction
Railway facility district
Inconsistent
Regional Development
 Aim of the Law
- Integrated Development Law-

 To solve inconsistency between railway

planning and regional planning.
⇒ The law promotes to supply large area of residential/
business district in an integrated manner .

Park Concept of the Law

Station
square

Railway facility district Railway Construction

Station
square Consistent
Regional Development
Park
 Approach of Land Readjustment
- Integrated Development Law-

✓ Effective for comprehensive regional development converting

the land from agricultural to urban/residential area.
✓ Infrastructure is financed by the sale of a part of the
reserved area.
Park

Station
square

Railway facility district

Railway facility district
Station
square

Park

· Different physical shape · Reshaped land

· Poor public facilities · Sufficient public facilities
 Flow of the Railway Construction
1st Stage
Purchased in
Advance

Railway facility district

A part of
“priority area”

✓ “Priority area” is specified.

✓ Railway facility districts are also specified.
✓ A part of the land is purchased in advance by the public entities.
 Flow of the Railway Construction
2nd Stage

Re-plotting the
land
Railway facility district

✓ “The land readjustment plan” is authorized, and land usage

within a priority area is determined.
✓ The land purchased in advance is re-plotted.
 Flow of the Railway Construction
3rd (final) Stage
Park

Station
square
Completion
Railway facility district

Station
square

Park

✓ Public facilities are constructed by the sale of a part of the

reserved area.
✓ Comprehensive urban development is completed.
 Outcomes of TX Project
Rider-ship of Tsukuba Express (TX)
Thousands of People / day
300
250 96 98
94
94
200 89
77
150
73
100 176 187 192
146 164
118
50 77
0
2005 2006 2007 2008 2009 2010 2011

Train Passes Other

Source: MIR

Passenger has been increasing steadily.

©MIR
 Successful Outcomes
Concept of the Law

 Integration of “railway construction” and “land

readjustment”
Park

Station
square

Railway facility district

Railway facility district
Station
square

Park

Before After
 Application to other projects

 The model can be applied to a less profitable

project.
Tsukuba Express

Park
✓ Land and Infrastructure are
Station assets of the railway company
square
(Vertical Integration)
Railway facility district

Station
square
Other Projects (less profitable)
Park ✓ Land and Infrastructure are
assets of the public sector
(Vertical Separation)
 Summary of Part 2

1) Since the 1970s, it has become too risky for the private
sector to promote both railway construction and land
development.

2) For promoting integrated development, regional governments

leaded both projects in Tsukuba Express (TX) project.

3) Two projects are closely related, and regional governments

receive benefits through dividends as shareholders of TX and
increase of real estate tax.
 Summary of Presentation

Private Sector Public Sector

Railway Construction Land Development Railway Construction Land Development

Projects during rapid population increase Projects during gradual population increase

Point 1
Railway construction and urban development should be integrated.

Point 2
Public sector should also play an important role for the projects these years.
24
 Integrated Land Development
and Railway Operation-
-Experiences in the Japanese passenger railway sector-

Thank you
<Reference>
Kurosaki, F. and Ogura, M. (2013) Construction of Tsukuba Express and
Urban Development Based on the Integrated Development Law,
Selected Proceedings for 13th WCTR