Chapter 6: Toward More Competitive Economy and Society

〔Stimulating the economy〕 MLIT efforts to fight deflation and stimulate the economy include: revitalizing the real estate market; pushing ahead with the initiative concerning special zones for structural reform; stimulating demand and creating jobs in the transport market by ensuring a playing field and taking deregulatory measures; and developing social safety nets.

〔Developing wide-based transport networks〕 ○Developing highways Japan is lagging behind the U.S. and European countries in terms of highway development. The country needs to develop, among others, high-standard highways as part of ongoing efforts for efficient and effective of national land. MLIT has been studying the impact, needs and methods regarding planned road development. As for national expressways, the ministry has recently conducted strict project assessment in light of the recommendations put forward by the panel of experts called the “study committee on assessment methods for road development projects.” Based on the results of this assessment, the ministry plans to construct roads in real need from the “toll road approach” and “direct control approach.”

International comparison of expressway development

(km) 30,000 Total length of the existing expressways after 1982 25,000 United Stats : 80,000km France : 5,700km Germany : 7,919km China (25,130km) China : 0km 20,000 Japan : 3,232km

15,000 United States (89,232km) France (11,500km) 10,000 Germany (11,515km) 5,000 Japan (7,197km) Total length of expressways constructed after 1982 Total length of expressways constructed 0 1982 1985 1990 1995 2000 (Year) Note: Data are for 2002 for Japan and China, 2000 for France, and 1999 for U.S. and Germany.

○Improving the trunk railway network Kyushu Shinkansen The development of the trunk railway network in Japan is almost completed as a “Tsubame” network. Yet there is room for further improvement in service quality, including operating speed, and railway facilities. As part of it efforts to make such improvement, MLIT has been committed to the construction of new Shinkansen lines. (In 2004, the Kyushu Shinkansen Line started operation between Shin-Yatsushiro and Kagoshima-chuo.) Other efforts to develop the broad-based trunk railway network include speedups of conventional trunk railways and the technological development of the Superconducting Maglev (magnetic levitation system) and Gauge Change Train.

－ 50 － ○Improving the domestic airline network is now operated to full capacity, and expanding its capacity is an urgent issue. In fact, the project to expand the airport has recently been approved. MLIT is determined to promote the development of metropolitan hub airports, including this project, as its top priority.

Numbers of domestic airline passengers at Haneda Airport and forecasts (Unit: 10,000 persons) 9,000 8,550 8,030 5,949 8,000 7,320 5,477 7,000 6,070 4,301 6,000 3,809 5,000 2,427 Forecasts (for reference) 4,000

Annual total 2,200 3,000 *The forecasts are based on the assumption 2,000 Actual numbers that the expansion project is completed by 1,000 2009.

0 1983 1985 1990 1995 2000 2007 2012 2017 2022 Source: MLIT (FY)

Haneda Airport expansion project

N

Runway B 2,500m Runway A 3,000m Runway C 3,000m

International flight section Tokyo Bay

Tama River passenger 2nd building terminal 1st passenger passenger 1st building terminal

Access road to taxiway

Runway to be developed 2,500m

○Improving the domestic maritime transport network MLIT is working to improve the domestic maritime transport network for better efficiency and put techno super liners into service.

－ 51 － 〔Developing the international transport network〕 The level of development of international hub airports at metropolitan areas in Japan has not been sufficient enough to. They cannot adequately accommodate the requests from the airlines to increase the number of flights or to start new flights. This may deteriorate the international competitiveness of the airports. MLIT has been taking a number of measures to remedy this situation, including: developing Narita Airport; promoting the acceptance of international scheduled flights at Haneda Airport by taking advantage of takeoff and landing slots to be created by the expansion project; moving forward with the second phase project at Kansai International Airport; and the construction of Chubu Centrair International Airport. In addition, the ministry has been vigorously holding consultations to conclude new civil air transportation agreements. All these efforts are part of the ministry’s initiative to develop the international air transport network. MLIT is also working to improve international sea transport.

Numbers of takeoffs/landings and passengers at Narita Airport ○ The capacity-the number of takeoffs/landings-was increased by 50 percent from 135,000 to 200,000 per year after the interim parallel runway opend in 2002. ○ It is forecast that the annual total of takeoffs/landings will reach 200,000 by 2008 and the capacity limit of 220,000 by 2010. Forecasts 6,000 250,000 Any capacity expansion (for reference) will require consultation with local community. 5,000 220,000 The interim parallel (Runway: 200,000 runway opend service. 200,000 2,500 m) (Runway: 2,500 m) 4,000 200,000 No. of airline (Runway: 150,000 passengers 2,180 m) 3,000

2,000 Sept. 11 100,000 1,000 Takeoffs and landings No. of airline passengers (unit: 10,000) Numbers of takeoffs/landings and capacity limits 50,000 0 1985 1990 1995 2000 2002 2004 2008 2010 2012

〔Improving coordination among transport modes〕 ○Developing multi-modal transport systems To boost the international competitiveness of Japanese industry, MLIT is working to improve coordination among airports, ports, train stations, etc. on one hand and high-standard highways, roads that connect them, and access railways on the other, as well as enhancing the functions of these facilities. The ministry is aiming to ensure that door- to-door service, which is in growing demand, will be delivered at reasonable costs and in an environmentally-friendly manger. MLIT is also developing the National Integrated Transport Analysis System (NITAS) designed to analyze and assess the impact of transport system development.

○Improving transport access to airports MLIT aims to shorten the time required to go from central Tokyo to Narita Airport by train to less than 40 minutes by supporting the initiative of Narita Rapid Rail Access. The ministry is also working to improve road access to the airport. In addition, MLIT is working to further improve access to Haneda airport and ensure easy access to Chubu Centrair International Airport.

－ 52 － Functional reinforcements for metropolitan airports Improving transport access to metropolitan airports ★Initiative of Narita Rapid Rail Access ★Improving Central Tokyo - Narita Airport: almost one hour (now) → Less than 40 minutes (slated for FY2010) •Reduced congestion and easier transfer ★Improving Narita Airport •Building a platform dedicated to “Sky ★Improving road access Liner” (to be competed by FY2009) •Early completion of the 2,500 m •Early implementation of the parallel runway ★Connecting the Metropolitan Asakusa North Chiba road project •Expansion of the airport capacity Line to •Early construction of the eastern •Direct access to both airports from Tokyo Station sections of Tokyo Gaikan Project implementation as part of the local Expressway redevelopment plan is under study as a viable option. ★Improving Keikyu-Kamata Station Keisei Takasago •Increasing the capacity of the Keihin Kyuko Nippori Imba Nihon Medical School airport line Narita airport •Increasing the through trains from the direction of Yokohama (slated for FY2012) Tokyo Hamamatsu-cho ★Haneda Airport expansion To Haneda airport To Yokohama Airport line Haneda airport •Fundamentally increasing the airport Keikyu- capacity with a view to internationalizing Kamata the airport (slated for 2009) Main line Runway B Runway C Keikyu- 2,500 m 3,000 m To Shinagawa Kamata Station Other projects Yokohama •Extending the Rinkai line to Tennozu Runway A Isle (put into service in December 2002) An artist’s rendering of 3,000 m •Construction of on Keikyu-Kamata Station Tokaido Shinkansen Line (put into and its vicinity Runway to be constructed service in October 2003) 2,500 m

〔Developing a globally competitive physical distribution market〕 ○Measures to strengthen international physical distribution functions MLIT aims to develop a “marine highway network,” which is designed to meet the seemingly contradictory objectives-safety and efficiency of ship navigation. To this end, the ministry is taking a number of steps, including: developing international key shipping courses; achieving “nonstop” navigation inside the bay; developing gate way ports and subsidiary gate way ports; and promoting the 24-hour operation of ports. The ministry is also forging ahead with the “super hub port” project. This public-private partnership project aims to surpass other major ports in Asia in terms of cost and service by developing large-scale, integrated terminal systems and taking advantage of IT.

Promoting the super hub port project Super hub port project

Overall goal: To surpass other major ports in Asia in terms of cost and service •To reduce port costs by 30% to rival Pusan port and Kaohsiung port •To shorten the lead time from three or four days to one to rival Singapore port.

《Project process》 《Measures to be taken at a super hub port under broad-based port partnership》 Promoting the integration process Super hub port screening committee Establishing terminal operators ⇒Establishing designation criteria of logistic industries

Screening candidate ports Tokyo/Yokohama port, Nagoya port, Kobe/Osaka port, Kitakyushu port, and Hakata port

Developing a super hub port development program

Designating super hub ports

1. Integration of the terminal Implementing innovative and experimental Cutting costs with a large-scale operating system using IT and measures (from FY2004) terminal and the “public-built other means and private-operated” formula 2. Coping with large container ships

－ 53 － ○Measures to develop a highly-advanced physical distribution system that ensures overall efficiency MLIT has been promoting wider use of IT in the physical distribution sector. Specifically, the ministry is supporting the application of ITS or GIS (geographic information system) to physical distribution. Recently it has conducted a demonstration experiment involving electronic tags. In interregional distribution, MLIT pursues more efficient physical distribution using intermodal transportation and other means. To this end, the ministry is providing support in developing ports, train stations, and other distribution hubs and in boosting the efficiency of cargo transport on key routes. In addition to providing such support, MLIT is taking numerous measures for urban physical distribution. Among them are: the development of orbital roads and bypass roads and elimination of highway-railroad grade crossings by building overpasses or underpasses to ease congestion; construction of facilities designed to facilitate consolidated distribution; promotion of Transportation Demand Management (TDM) and other systems. Furthermore, MLIT is promoting the development of a next-generation maritime transport system that takes advantage of IT, as well as new types of distribution services.

〔Revitalizing industry〕 ○Measures to revitalize the transport industry Amid the deregulation process in the transport industry, railway operators are taking steps to improve their service, including the introduction of IC card tickets. Efforts are also being made toward the complete privatization of JR companies. Measures to revitalize domestic marine transport include, among others, the creation of a competitive market. As for the airline industry, MLIT is contributing to better service for passengers by encouraging entry of new airliners into the market. Such encouragement includes preferential allocation of takeoff and landing slots for new entrants and equalization of qualifications for using airport facilities. The ministry is also helping the industry solidify its management base by taking action in an integrated manner to stimulate demand, redouble its support for efforts to improve service, and review relevant regulations.

○Real estate industry MLIT aims to upgrade real estate management. In particular, the ministry promotes appropriate and efficient management of rental property.

○Rejuvenating the construction industry The ministry’s efforts to rejuvenate the construction industry include: promoting the establishment of social safety nets; regulating company evaluation in public works projects; expelling bad or disqualified contractors from the market; studying the introduction of the construction management (CM) approach; improving labor standards in the industry; solidifying management base for subcontractor and construction-related industries; and raising the levels of construction skills. Trends in construction investment (nominal term) and the numbers of licensed contractors and workers (Units: 1,000 for contractors, 10,000 for workers) (Trillion yen) Peak at 84.0 trillion Total in FY2003 90.0 yen in FY1992 54.0 trillion yen 900 Private investment (trillion yen) 6.04 million workers 80.0 Government investment (trillion yen) (average in 2003) 800 Licensed contractors (unit: 1,000) 70.0 Workers (unit: 10,000) 700

60.0 600

End of FY2002 500 50.0 552,000 contractors Private investment 40.0 31.1 trillion yen 400 30.0 300

20.0 200

10.0 Government investment 100 22.9 trillion yen 0.0 0 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 (FY) Notes:1. The figures for construction investment are estimates for FY2001 and FY2002 and a forecast for FY2003. 2. The number of licensed contractors represents the figure at the end of each fiscal year (the end of March of the following year). 3. The number of workers represents the annual average. Sources: MLIT, Estimate of Construction Investment and Licensed Contractor Survey; MPHPT, Labour Force Survey － 54 － ○Rolling stock industry MLIT is supporting the development of technology regarding narrow-gauge, ultra low-floor streetcars and the joint development of standard cars.

○Shipbuilding and ship machinery industries An advisory body to MLIT has recently compiled a report called “vision and strategy for Japan’s shipbuilding industry,” so that Japan’s ship-related sector (shipbuilding and ship machinery industries) will continue to play a central role in shipbuilding and marine transport in the world. Based on this report, MLIT plans to further its policies to solidify the industrial base through integration, realignment and partnership. It also intends to upgrade advanced production processes that take advantage of IT. In addition, the ministry is promoting its support arrangements designed to facilitate corporate realignment in the shipbuilding industry. Furthermore, MLIT is supporting small- and medium-sized shipbuilders and ship machinery manufacturers in solidifying their management bases. The ministry is also promoting the development and practical application of maritime industrial technologies highlighted by mega-floats.

Changes in shipbuilding tonnage in the world

3,500 3,420 3,392 Others 3,338 China 3,170 10.9 3,129 6.6 13.4 W. Europe 5.6 5.5 3,000 S. Korea 6.6 5.2 Japan 2,782 5.8 2,753

2,584 6.8 12.1 2,554 12.7 2,546 13.2 16.5 5.7 2,500 8.7 7.5 8.0 2,265 4.3 5.8 14.9 38.2 37.5 5.8 10.4 2,054 1,967 15.7 2,000 4.2 19.2 17.5 1,863 1,819 1,833 1,816 12.0 12.7 38.8 3.6 38.6 37.1 39.0 1,693 1,682 1,685 13.5 16.8 18.9 17.2 1.2 1,591 1,589 1,610 5.5 27.8 16.1 32.9 21.0 0.9 18.2 2.4 22.3 1.8 15.0 13.1 1.9 1,500 1,429 22.1 1.5 16.3 28.6 32.2 28.5 2.3 0.2 0.8 15.1 1,324 1,310 1.9 18.3 1.2 18.3 12.2 1,226 31.0 18.7 27.5 17.9 18.0 26.9 22.4 21.3 17.9 1,091 22.7 2.0 14.4 2.5 21.5 2.4 34.2 25.1 8.0 21.6 15.9 25.6 1,000 2.3 14.8 21.7 49.7 8.3 16.2 21.8 46.8 32.6 22.6 5.5 15.7 9.7 42.5 17.0 23.4 39.7 37.9 38.4 35.8 3.3 3.5 4.0 29.1 39.3 40.3 53.0 52.3 41.1 38.7 500 49.6 48.5 43.5 44.0 48.5 41.9 40.7 43.0 45.3 34.7 46.6 40.6 32.9 46.6 37.0

0 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 (Peak)

Notes:1. Completion basis. 2. The figures in each bar represent the share. Source: Compiled from data from Lloyd’s (only vessels of a gross tonnage of 100 or more are covered.)

○Measures for mariners MLIT works to secure and train excellent mariners, promote employment and improve the working environment in the industry.

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