JR Central s Business Strategy

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29 th February 2012 JR Central s Business Strategy Central Japan Railway Company Yoshiyuki Kasai

JR Central s Missions To manage sustainable and progressive passenger transportation of the Tokaido Shinkansen operated between Tokyo and Osaka: Japan s two major metropolitan areas. Nagoya Tokyo Osaka JR Central s Operating Area

Decision Making: Politics and Business Achievements Method Requirements Characteristics Politics fuzzy, diverse consensus (bottom-up) accountability transparency compromising (populism) Business clear, simple (maximizing profit) leadership (top-down) foresight, strategy, readiness confidentiality thorough (rationality) Resource allocation distributed, equalized focused Responsibility irresponsible responsible for results

JR Central s Business Strategy (As of the foundation in 1987) Present (tactics) Provide safe and reliable transportation service Near Future (strategy) Strengthen Competitiveness of HSR Unified all train configuration to 16 cars (1991) Unified all train speed up to 270km/h (2003) Opened Shinagawa Station (2003) Future (grand strategy) Develop and Complete SCMAGLEV Technology and Apply to Practical use Own and Operate Chuo MAGLEV as Tokaido Bypass

Safety records of JR Central Carried 5.1 billion passengers since the commencement of operation. JR Central s accident rate is one-fifth that of the Japan National Railways. Notes) 1. figures: number of accidents per million train kilometers 2. JNR : avg b/w FY1976-1985, JR East: avg b/w FY1987-2009, JR Central & JR West: avg b/w FY1987-2010.

Punctuality and Reliability of the Tokaido Shinkansen (minutes) 3.5 3 trends in per-train delays 1972-1986 (Japan National Railways) 3.1 minutes / train 2.5 2 1.5 1 JR Central 1987-1996 0.8 minutes / train 1997-2006 0.4 minutes / train 2010 0.6 minutes / train 0.5 0 JNR '88 '90 '92 '94 '96 '98 00 '02 '04 '06 '08 '10 (FY)

Capital investments: Tokaido Shinkansen and conventional lines 145 Billion yen Conventional lines approx. 35 B yen Conventional lines approx. 15 B yen Shinkansen approx. 40 B yen 55 Billion yen Shinkansen approx. 110 B yen Japan National Railways avg of annual investments b/t FY1977-1986 JR Central avg of annual investments b/t FY1987-2010 (Source: JR Central)

Series 0 Inauguration: Oct. 1964 201 train sets Maximum speed: 220km/h Weight (tons/train set): 970 Inauguration: Oct. 1985 57 train sets (JR Central) 9 train sets (JR West) Maximum speed: 220km/h Weight (tons/train set): 925 Series 100 Copyright: Central Japan Railway Company

Series 300 Inauguration: Mar. 1992 61 train sets (JR Central) 9 train sets (JR West) Maximum Speed: 270km/h Series 700 Inauguration: Mar. 1999 60 train sets (JR Central) 12 train sets (JR West) Maximum Speed: 285km/h (Sanyo area) 270km/h (Tokaido area) Weight (tons/train set): 708 Weight (tons/train set): 711 Copyright: Central Japan Railway Company

Perfection of HSR Rolling Stocks: Series N700 Inauguration: July 2007 Maximum Speed: 330km/h (Tokaido area:270km/h ) No speed reduction on curves: Body Inclining System Improvement of acceleration

Investments to improve Tokaido Shinkansen 1. Speeding up: 220km/h to 270km/h 2. Better accessibility: Opening of Shinagawa station (Billion yen) 50 40 30 20 10 0 10 20 30 40 Rolling stock investments (FY) Ground facility investments (FY) Rolling stocks: 500 B yen 270km/h speed improvement: 200 B yen Shinagawa station : 100 B yen Total Investments (1989-2003) : 800 B yen 50 1989 1991 1993 1995 1997 1999 2001 2003

Transition of the Tokaido Shinkansen Trainset Series 140 120 100 80 60 40 20 0 133 133 118 123 126 124 125 12 6 122 123 122 119 122 123 129 121 121 122 121 5 1 1 1 15 5 109 112 115 1 17 32 99 1 21 27 11 48 36 24 37 22 45 10 48 10 38 52 57 57 60 60 61 54 60 9 57 60 61 8 57 57 60 61 7 57 61 60 53 89 89 87 50 61 73 65 61 50 3 61 61 61 60 54 46 47 52 41 2 33 37 41 24 25 25 1 15 12 6 '87 '90 '93 '96 '99 '02 '05 '08 133 14 78 52 3 12 10 8 6 4 2 0 Series 0 Series 100 Series 300 Series 700 Series N 700 M axim um N ozom irunning in an hour

Road to all 270km/h Index *1 100 80 60 Ground facility investments Cumulative total Rolling stock investments Cumulative total 7 Nozomi per hour *3 40 20 0 1 Nozomi per hour Ratio of 270km/h operated trains in total shinkansen *2 2 Nozomi per hour 1989 1991 1993 1995 1997 1999 2001 2003 Fall *1. Indicates 2003 cumulative total investments as 100 *2. Includes 270km/h operated Hikari trains. Numbers are as of the beginning of each fiscal year. *3. rush hour maximum 11

Opening of Shinagawa station: improvement on accessibility Shinjuku Shibuya Tokaido Shinkansen Shin-yokohama Tokyo 7km Shinagawa 20-30 min. access improvement 20-30 min. travel time shortened for passengers from south west Tokyo

Impact of transit oriented development: before & after the opening of Shinkansen Shinagawa Sta. 1995 2003

Market share: Shinkansen and Air Passengers per day from Tokyo MA JR Central JR West Tokyo Nagoya Osaka Okayama Hiroshima Hakata 342km 515km 676km 821km 1069km Nagoya MA 100% Osaka MA 85% 15% Okayama MA Hiroshima MA Fukuoka MA 11% 75% 25% 63% 37% 89% *Data of 1Q of FY2011 (by JR Central s calculation)

Tokaido Route and Chuo Route Yamanashi Test Line (42.8km) Tokyo Nagoya Osaka Tokaido Shinkansen Chuo Shinkansen Route

Series L0 : For Practical Operation

80 90 00 Development History of the Superconducting Maglev system Event 87.7 Maglev Project Planning Division established 89 Decision to construct the Yamanashi Maglev Test Line (as a part of the future revenue service route) 90 Start of construction of the Yamanashi Maglev Test Line 97.4 Start of running tests 00.3 The technical prospects for practical application of the Superconducting maglev is acknowledged by the Evaluation Committee under the Ministry of Transport, currently recognized into the Ministry of Land, Infrastructure, Transport and Tourism(MLIT). 05.3 The Evaluation Committee acknowledges that the foundation technology for Superconducting Maglev is established for practical application. 06.9 Decision of renewal and extension plan of the test line 10 20-09.7 The Evaluation Committee determined that, the technology required for a commercial line has been cyclopaedically and systematically established, and it is possible to move forward with actually creating detailed standards and specifications for a commercially viable line. 11.12 Technological Standard of Superconducting Maglev was approved by MLIT End of 13 Completion of renewal and extension of the test line End of 13-16 Start of running for the advance verification of revenue service [ 15 Start of paid test rides] [ X Start of prior revenue demonstration between Kanagawa and Yamanashi] 27 Start of PhaseⅠ revenue service between Tokyo and Nagoya 45 Extension of the revenue service from Nagoya to Osaka

SCMAGLEV & Transrapid (Normalconducting MAGLEV) SCMAGLEV 80 mm Transrapid 10 mm 100 mm 10 mm Significant and more powerful magnetic field enables: - high transport density and super-fast mass transportation - highly safe operation greatly reducing risks of derailment, even during earthquakes

速度 (km/h) Speed [km/h] High performance of speed and acceleration 600 500 430 400 SCMAGLEV Shanghai Transrapid 300 200 100 0 0 1.8 3.9 5.7 13.3 20 30 10 20 30 距離 (km) Distance [km]

Impact of Magnetic Field The measurement value of magnetic fields falls below the International Commission on Non-Ionizing Radiation Protection (ICNIRP) guideline. ICNIRP Guidelines Static magnetic field 400 Gauss 1 On the vehicle (on seats) Approx. 1/100 Ratio Along the track (Directly under 8m high viaduct) Approx. 1/1000 Dynamic magnetic field 440 Gauss/s 2 Approx. 1/3 Approx. 1/30 1 Static magnetic field: ICNIRP 1994 guideline values. Is now revised to 4000 Gauss in ICNIRP 2009 2 Dynamic magnetic field: The magnetic flux density ratio which can be applicable to guideline under 820Hz dynamic magnetic filed Reference: Terrestrial magnetism: Approx. 0.5 Gauss

Specification of SCMAGLEV Rolling Stock Performance Max cruising speed Passenger capacity SCMAGLEV Transrapid Air Tokaido bypass Shanghai B777-200ER km/h 500 430 890 people 1000 446 223 Carrying weight (compared to vehicle weight) % 33 28 23 Weight (per seat) t/seat 0.42 0.70 1.26 Energy consumption (per seat) Wh/km /seat 74 81 approx.150

The Linear Chuo-Shinkansen project flow under the Nationwide Shinkansen Railway Development Act (Article 4) Master plan Master plan designated : 1973 (Article 5) (Article 14-2) (Article 6) (Article 7) Surveys and Reports Council for Transport Policy Designation of Operation & Construction Entity Development Program Topographical/geological surveys instructed: 1990 Four Report surveys submitted: instructed:2008 Report submitted: 2009 Final consultation for nominating operation & construction entity and for designating the development program: May 2011 Operation & construction entity nominated: May 2011 Development Program decided: May 2011 (Article 8) Instructions for Construction Construction instructed: May 2011 (Article 9) Engineering Programs Application & approval of engineering programs Start of Construction

The Chuo Shinkansen(Tokyo - Nagoya) Tokyo Nagoya Chuo Shinkansen (Tokyo-Nagoya):approx. 286km : Projected area : Yamanashi Maglev Test Line (42.8km) : Projected stations