Shizuoka-Toyokawa Expressway 8 36-38 Iv) Specific Economic Benefits 9 39-1;6

RETURN STO RESTRICTED REpOR'Ts DE: Report No. TO-474a

Public Disclosure Authorized This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized

APPRAISAL OF

A FIFTH EXPRESSWAY PROJECT

SHIZUOKA - TOYOKAWA

JAPAN Public Disclosure Authorized

May 13, 1965 Public Disclosure Authorized

Projects Department CURRENCY EQUIVALENTS

U.S. $1 = Y 360 1 Yen = U.S. ¢ 0.28

Fiscal Year

April 1 - March 1 JAPAN

APPRAISAT. o0 . rIFTH EXPRE!%SUJAY PROJECT

SHIZUOKA - TOYOKAWA

TABLE OF CONTENTS

SUMMARY Page Paragraphs

I. BACKGROUND 1 1 -22

A. Introduction and Related Bank Loans 1 1 - 3 B. Transportation in Japan 1 - 9 CO Five-Year Road Improvement Program 2 10-11 D. The Borrower 3 12-15 E. Existing Bank-financed Expressways 4 16-22

II. TE PROJECT 5 23-49

A. Description 5 23-25 B. Cost Estimates and Probable Loan Disbursement 6 26-29 C. Economic Justification 7 30-46 i) The Importance of the Shizuoka-Toyokawa Region 7 30-31 ii) Traffic and Transport in the Region 7 32-35 iii) Traffic on the Shizuoka-Toyokawa Expressway 8 36-38 iv) Specific Economic Benefits 9 39-1;6

D. Financial Aspects 11 47-49

III. CONCLUSIONS AND RECOMMENDATIONS 12 50-52

TABLES

1. Bank Financing of Tokyo-Kobe Expressway 2. Five-Year Road Improvement Program 3. Summary Statement of Revenues and Expenditures 4. Summary Balance Sheets 5. Memorandum Account of Toll Revenues and Expenditures, h/l/63 to 3/31/6b 6. Estimate of Project Cost 7. Freight Traffic in the Shizuoka-Toyokawa Region, 1955-63 8. Passenger Traffic in the Shizuoka-Toyokawa Region, 1955-63 9. Estimated Average Daily Traffic, Shizuoka-Toyokawa Expressway, 1969-79 10. Comparison of Operating Costs on the Existing Highway and the Shizuoka-Toyokawa Expressway, 1969 11. Financial Forecast of the Shizuoka-Toyokawa Expressway 12. Schedule of Proposed Toll Charges

MAPS

1. JAPAN: National Highway System 2. Shizuoka-Toyokawa Expressway JAPAN

APPRAISAL OF A FIFTH EXPRESSdIAY PROJECT

SHIZUOKA - TOYOKAWA

SUMMARY

i. The Government of Japan and the Nihon Doro Kodan (Japan Public Highway Corporation) have requested the Bank to make a loan of US$75 million equivalent to the Kodan to help finance the construction of 106 km of toll expressway between Shizuoka and Toyokawa, which is part of the Tokyo-Kobe expressway.

ii. The Bank has already made four similar loans over the past five years totalling US$205 million to finance the construction of 422 km of the expressway between Tokyo and Xobe, 183 km of which is now open to traffic. Design standards and contracting procedures for the proposed project would be the same as for the four previous projects. The project is scheduled for completion by April 1969, at which time the whole expressway from Tokyo to Kobe will be open to traffic.

iii. Total project costs, including construction, land acquisition, engineering and interest during the construction period, are estimated at US$322 million equivalent. The proposed Bank loan would represent about 30% of the estimated construction and land costs.

iv. Although no bids have been received from non-Japanese firms on any of the previous projects, the Borrower will continue to provide opportunity for internationa'l competitive bidding on the major part of the works included in the project.

v. The number of motor vehicles registered in Japan has increased fivefold in the last ten years. Freight and passenger traffic by highway has increased at a substantially higher rate than by other modes of transportation. To help meet the increasing highway demand, the Government has approved an investment of US$11.4 billion equivalent in highway construction, improvement and maintenance over the five-year period from 196h through 1969; the project is one of the priority expressways incluided in the five-year investment program.

vi. The region served by the project expressway accounts for only 3.5%o of Japants total area, while its population of about 7.5 million represents nearly 8% of the total; about 13% of Japants industrial production originates there. The completion of the Tokyo-Kobe Expressway will be a crucial step in alleviating the serious shortage in transportation capacity which now prevails in the Tokyo-Nagoya-Kobe region as a whole. vii. The project has a sound economic justification. On the basis of reasonable assumptions regarding traffic growth and composition, the rate of return on the investment from reduced transportation costs alone is estimated at about 13% and with time savings included at about 20%3. viii. The project is financially sound and the toll revenues would pay back the total investment costs, including interest at 6%o in a period of between 20-23 years, which is considerably less than its probable economic life. ix. The proposed project provides a suitable basis of Bank loan of US$75 million equivalent; an appropriate term would be 25 years including a 4h-year period of grace. -1- JAPAN

APPRAISAL OF A FIFTH EXPRESSWkAY PROJECT

SHIZUOKA-TOYOKAWA

I. BACKGROUND

A. Introduction and Related Bank Loans

1. The Government of Japan has requested a loan of TJS$75 million equivalent from the Bank to assist in financing the remaining section of the Tokyo-Kobe Expressway. The project was proposed for Bank consideration in September 1964. The appraisal report is based upon detailed information submitted by the Borrower, the Nihon Doro Kodan, in January 1965 and on the findings of a Bank appraisal mission in February 1965.

2. The project (see Map 1) is a 106 km section of the 536 km long Tokyo-Nagoya-Kobe Expressway for which the Bank has already made four loans (Nos. 248, 302, 357 and 37[-JA) totalling US$205 million over the past five years. A summary of the previous loans is given in Table 1, from which it will be seen that, including the proposed loan of US$75 million, the Bank's participation in the total expressway cost of almost US$1.3 billion would be 22%. The average cost of the expressway including construction, right-of-way and engineering is about US$2.4 million per kilometer, of which right-of-way accounts for 20%.

3. The Bank has also made one loan of US$80 million (Loan No. 281-JA) in 1961 to improve rail transportation in Japan. The loan helped finance the construction of the new Tokaido Express Railway connecting Tokyo, Nagoya and Osaka, the total cost of which was about US$1 billion. The railway was opened to traffic in October 1964 and serves much the same area as the Bank-financed expressways. In addition, the Bank made a loan of UJS$25 million (Loan 398-JA) in 1964 to help finance the construction of an urban expressway between Haneda (Tokyo Airport) and Yokohama.

Bo Transportation in Japan

4. As explained in greater detail in the appraisal report for the Third Expressway Project (TO-304a dated September 1963) Japants domestic transportation system consists mainly of railways, coastal shipping and highways. Air transport is relatively limited because of the short distances between major industrial areas.

5. The railway network is dense, carries heavy traffic and is efficiently operated; main lines are utilized to saturation largely because of heavy passenger traffic. The new Tokaido Express Railway is expected to relieve this pressure somewhat between Tokyo and Iobe, but increased rail capacity generally is still considered necessary.

6. Coastal shipping is also an important mode of transportation in Japan. Although less than 10lo of the total tonnage of freight traffic is moved by this mode, it accounts for almost one-half of the traffic measured in ton-kms., due to the relatively long distances of haul. 7. The total road network in Japan exceeds 150,000 km in length, but less than 20% of this length is paved. Most roads, even national highways, are narrow and winding with little or no shoulders. Traffic normally operates under congested conditions, and as a consequence, vehicle operating costs are high (see paragraph 42) and accident rates are heavy; on Japan's primary National Highway No. 1, for example, there are about 550 accidents per hundred million vehicle/kms., which is more than twice the level on expressways in Japan and five times the level of similar expressways in the United States.

8. The country's registered ownership of motor vehicles reached 6.8 million units at the end of 1964, involving a five-fold increase during the previous 10 years. During that perlod passenger cars and liuht 4-wheeled vehicles increased about six-fold to 4.0 million units while the number of trucks increased about 312 times.

9. The National Economic Planning Board studies traffic demands and plans transportation investment in Japan, The Ministry of Transportation has the responsibility for assaring effective coordination between the various modes of transport and for this purpose has extensive authority over new investments, rates and fares, and transport operations. Highway construction and management is primarily the responsibility of the Ministry of Construction. Toll roads are financed, built and operated by semi- autonomous agencies which are responsible to the Ministry; there are at present three such agencies: (i) the Japan Highway Public Corporation, dealing mainly with toll roads in rural areas; (ii) the Tokyo Expressway Public Corporation, dealing with urban expressways in the Tokyo/Yokohama metropolitan area; and (iii)the Hanshin Expressway Public Corporation, covering urban expressways in Osaka and Kobe cities. The prefectures (provinces) and other local public bodies have their own highway organizations and independent sources of revenue, but many roads of national importance within their areas of jurisdiction qualify for government grant.

C. Five-Year Road ImTrrovement Program

10. The Government is acutely conscious of the increased need for improved transportation facilities generally and for highway transportation in particular. It has approved an investment of US$114.billion equivalent in highway construction, improvement and maintenance over the five-year period from April 1964 to March 1969, about a half of which will be financed from the national budget and the remainder by international or domestic borrowing and by local authorities. Almost 10% of the anticipated Govern- ment budget expenditures over the five-year period of the development program will go into highways, which appears high for a country at Japan's level of economic development, but reflects the fact that highway construction on a large scale started only after World War II.

11. Details of the five-year road program are given in Table 2. The general objectives of the program are to increase the expressway network (including both city and rural expressways) from 84 km in 1964 to 790a. by 1969, and to double the paved length of the general road network to 55,000 km during that period. Financial provision ^or the project expressway is included in the program. -3

D. The Borrower

12. The Borrower and executing agency is the Nihon Doro Kodan (Japan Public Highway Corporation) whose organization and policies have been described in detail in previous appraisal reports on the Tokyo-Kobe expressway. It will be recalled that it is an agency of the M'linistry of Construction established in 1956 to take over the Ministryts responsibility for toll transport facilities, including roads, bridges, tunnels, ferries and parking lots. Although the I'odan is autonomous in form, it is in fact subject to a large degree of rministerial control.

13. The Kodan finances its construction expenditures by borrowing and by interest-free government investment, in proportions which are calculated to make the average cost of all its funds about 6%. The tolls which Kodan charges for the use of its facilities are designed to cover its operation and maintenance expenses, to pay interest on its debt, and to repay the capital costs within the period of useful life of the facilities. For expressways, the useful life is reckoned at about 30 years. Since revenues from new facilities only build up slowly, and total receipts from those facilities in the early years are not adequate to cover all charges within the relatively short average term of Kodan ts debt (about ten years), Kodan is obliged to re-finance a large proportion of its maturing debt.

14, As shown in Table 3, the financial results of Doro Kodan operations continue to show substantial improvement as traffic develons over the more recently constructed facilities. Results for the fiscal year 1963/64 and the half-year to September 1964 are adversely affected by deficits incurred on the first section of the Tokyo-Kobe expressway which was opened only in July 1963 and has not yet developed sufficient earming power to meet interest charges. Comparative figures for the past five years are as follows: Net Surplus or (Deficit) after Interest Charges

Tokyo-IKobe All Other Total Expressway Toll Facilities Kodan -(Yen Millions) ------…-

1959/6o - (291) (291) 1960/61 - 21 21 1961/62 - 784 784 1962/63 - 1,525 1,525 1963/64 (1,019) 2,624 1,605 First half of 1964/65 (1,096) 2,003 907

15. The ratio of operating costs to operating revenue, which was 65% in 1956/57, the year in which the Kodan began operations, had diminished to 26% in 1963/64 and to slightly under 20% in the six months to September 196k. If the Kodan charged tolls over the entire life of its fixed assets, which is assumed to be about 30 years, it would now be earning 12% on the - 4 - value of its fixed assets in service, with the exception of the Tokyo-Kobe expressway. it is as yet too early to calculate the ultimate return which the Expressway will earn, but preliminary indications are that financial benefits comparable with those of the original appraisal will be realized, i.-e. that this facility will earn safficient net revenue.to amortize the cost in 20-23 years at 6%J interest. The summary of the Xodants Balance Sheet (Table 4) shows that, as of September 30, 1964 the value of toll facilities in operation was Yen 173 billion (US$480 million), of which Yen 118 billion (US$330 million) represented the cost of the first sections of the expressway to be opened to traffic. A complete list of the remaining facilities in operation during 1963/64 is given in Table 5.

E. Edxsting Bank-financed Expressways

16. Two sections of the Tokyo-Kobe expressway, also f-inanced by the Bank and totalling 183 kIn, have already been opened to traffic (Rwef. 1 e&2 of Table 1), and a comparison of actual traffic volumes and toll revenues with those forecast at the time of appraisal is possible. Since one of the two sections was only opened last September, it is too early to reach any meaningful conclusion, but the comparison for the two sections combined indicates that:

a) total traffic volumes in 1964 were lower than those forecast by about 10%lo for those sections which had been opened more than a year;

b) the traffic composition was different from that forecast, there being more nassenger cars and less trucks, resulting in almost equal proportions of cars and trucks instead of an expected ratio of about 1 to 3; and

c) toll revenues were lower than forecast by 15%-20% due to the factors mentioned under a) and b) above.

17. The following principal reasons seem to account for the lower total traffic volumes and different composition of traffic compared with forecasts:

a) the expressway sections were opened some six months later than anticipated;

b) the transportation system, and in particular the long-distance trucker, has not yet adjusted to this new mode of transport; time saved on the expressway is not being fully utilized, and consequently operating costs have not been reduced as much as anticipated; and

c) more passenger cars have diverted to the expressway than forecast, and the resulting decreased congestion on existing roads has encouraged truckers to remain on the old roads; recent improvements to the existing roads have had a similar effect. - 5 -

18. The Kodan believes and it seems reasonable that traffic will develop to the predicated volumes and composition after adjacent expressway sections are completed in a few years and after a period for the transportation system to adjust to the new conditions.

19. The cost of the two Barnk-financed expressway sections which have already been completed was estimated beforehand by the Kodan with reasonable accuracy. The first project, 72 km long, cost about 10% more than the original estimate plus contingency allowance. The second project, 104 km long, cost about 4% less than the original estimate plus contingency.

20. Completion of the two projects took slightly longer than planned, due mainly to unforeseen difficulties in the acquisition of right-of-way and to certain technical difficulties in tunnel construction which are not likely to arise in the subsequent projects. Notwithstanding the difficulties, parts of the expressway were opened to traffic on the schedlIed completion date, but the total length could not be opened until some 6 months later than scheduled. The delay is not unreasonable considering that an entirely new type of project for Japan was being constructed over a three to four- year period. The Borrower, and many Japanese construction contractors, are now using critical path techniques to plan work schedules for the more com- plex projects including expressway construction, and their estimates in this respect should be more accurate in the future.

210 The quality of workmanship in the completed expressways is good; operation, management, and maintenance by the Kodan is sound, and the policing arrangements are satisfactory. The economic and financial benefits are expected to develop as forecast, although, as mentioned above, there have been some slight differences in the first year of operation.

22, The projects still under consideration are progressing satisfactorily. The third project (Loan 357-JA) is about 12% completed ana tne fourth project (Loan 374-JA) is about 8% complete; cost estimates remain firm and the target completion dates of April 1969 are expected to be met, with certain priority sections being opened by the end of 1968.

II, THE PROJECT

A. Description

23. The project (see Maps 1 and 2) is a section of the Tokyo-Nagoya- Kobe Expressway, approximately 106 km long, extending from the Shizuoka interchange at its eastern end to the Toyokawa interchange at its western end. The two interchanges mentioned are included respectively in the third and fourth Bank-financed expressway projects. The project is a 4-lane divided highway designed to the same standards as the previous Bank-financed projects. The works involve the construction of all components of the expressway, and include 6 interchanges, 2 service areas and 5 bus stops. 24. Construction and improvement of essential access roads to the project expressway are the responsibility of the Ministry of Construction and local authorities. The Bank will not participate in their financing, but as in the case of the previous projects, an undertaking has been sought from the Government that the access roads will be completed satisfactorily in phase with the project construction. Such arrangements have worked well in the past projects.

25. Final designs for the project are well advanced; negotiations for land acquisition have already started and the first construction contracts are expected to be advertised for bidding by July 1965. As in the previous projects, opportunity will be provided for international competitive bidding on the major portion of the project works, although no foreign bids have been received on the previous projects. The value and size of contracts for international bidding were discussed and agreed during loan negotiations. The expressway is expected to be completed by April 1969. The time schedule for construction is realistic; it is somewhat sharter than for the adjacent sections because land expropriation problems are expected to be fewer, and new planning techniques have been introduced (see para. 20).

B. Cost Estimates and Probable Loan Disbursement

26. The cost estimates are detailed in Table 6 and are sumnarized below; they were prepared by the Kodan and are considered realistic. The figures below include provisions for contingencies (10% for construction and 30% for land) which are based upon previous experience and upon an extensive study of the trends in land and property values, wages, and prices of materials.

Estimated Cost Relative Item Yen Billion $ Mill. Equiv. Percentage I. Construction 73.4 204 73 II. Land Acquisition 21.9 61 21 III. Other Field Costs 5.7 16 6 Total Field Expenditure 101.0 281 100

IV. Research & Administration 4.4 12 ) 15 V. Interest during Construction 10.5 29 )

Total Project Cost 115.9 322 115

27. Costs are high but reasonable considering the nature of the terrain and the major structures and tunnels required. The average construction cost per km is US$1.9 million equivalent, compared with US$2.1 million for the adjacent 4-lane section of the third project to the east and US$1.5 million for the fourth project (with no tunnels) to the west. - 7 -

28. As with the previous expressway projects, the Borrower has proposed that loan funds should be applied towards financing construction and land acquisition, the cost of which, including appropriate contingency allowances, is estimated at US$265 million equivalent (reference Items I & II of para. 26 above). The proposed List of Goods and withdrawal percentage was agreed with the Borrower during loan negotiations, A Bank participation'of 30% in expetxditures on the above items commencing A'tpril 1, 1965 is appropriate for a Bank loan of US$75 million,

29. On the basis of the assumptions made in the preceding paragraph, and allowing an interval of about two months between project expenditures and disbursements from the loan account, the following annual schedule of disbursements would result from the planned works program: Fiscal Years (April 1 - March 31) (US$ million) 1965/66 1966/67 1967/68 1968/69 Total 3 18 30 24 75

C. Economic Justification

(i) The Importance of the Shizuoka-Toyokawa Region

30. Construction of the Shizuoka-Toyokawa Expressway is important for two major reasons. Firstly, it will complete the expressway which is intended to serve the'entire Tokaido region from Tokyo to Kobe. As explained in detail in the four previous reports on the expressway, as well as in the report on the new Tokaido railway line, the Tokaido region is one of the greatest industrial concentrations in the world; it has a serious shortage in transportation capacity which the expressway will help to alleviate.

31. The second purpose is to improve local traffic conditions in the Shizuoka and Aichi prefectures, which form the area of influence of the Shizuoka-Toyokawa section of the expressway. While this region accounts for only 3.5 percent of Japan's total area, its population of about 7.5 million represents nearly 8 percent of the total. The region is relatively industrialized and about 13 percent of Japan's production originates here. In 1961, its per capita income was about Y175,000 (nearly US$500 equivalent), which was about 20 percent higher than the national average. As far as motor vehicles are concerned, the area accounts for nearly 11 percent of all passenger cars and trucks and 9 percent of all buses.

(ii) Traffic and Transport in the Region

32. The total freight traffic within and through the Shizuoka and Aichi prefectures in 1963 was 16*8 billion ton/kms (see Table 7); the annual growth since 1955 has averaged a high 10 percent. The railways account for 43 percent, coastal shipping for 30 percent and trucking for 27 percent of total traffic measured in ton/km. Since the average distances of haul are much - 8 -

longer for shipping and for railways than for trucks, a very different picture is presented if the traffic is measured in tons: about four-fifth of the tonnage, compared to one-fourth of the ton/kms, is moved by trucks. The proportion of the freight traffic carried by trucks has nearly tripled since 1955, exclusively at the expense of the railways. This reflects the fact that while railway traffic between 1955 and 1963 increased about 50 percent, highway traffic grew nearly sixfold. The number of trucks registered increased nearly threefold, or about 15 percent annually, between 1955 and 19630 330 Passenger traffic in the region in 1963 amounted to 28.2 billion passenger/km (see Table 8); the annual growth since 1955 has averaged nearly 11 percent. The railways account for about 70 percent of the traffic and the highways for the remainder. The proportion carried on highways has doubled since 1955. About three-fourthsof the highway traffic is carried by buses and the remainder by passenger cars. Between 1955 and 1963, the number of passenger cars registered increased about fivefold and the number of buses more than doubled,

34. The existing transport facilities between Shizuoka and Toyokawa consist primarily of: a) the Tokaido Railway line, which was supplemented last year by a new express line; and b) Primary National Highway No. 1, which more or less parallels the Tokaido line. There are, in addition, other railways and roads which serve primarily local needs, and a large number of ports.

35, The growth of traffic is straining the available transport capacity. In 1962, the average daily traffic on National Highway No. 1 was about' 8,300 vehicles, which is somewhat higher than the road's practical capacity. The traffic forecast, prepared by the tinistry of Construction and discussed in paragraph 37 indicat§s that by 1969 traffic on the road will approximately triple, which would involve very serious congestion even allowing for the planned widening of Highway No. 1. The congestion on the Tokaido railway line, where in 1963 the traffic exceeded the line's practical capacity by about 50 percent, was relieved last year by the opening of the new line, which doubled railway capacity. A detailed study on highway-railway competition in the Tokaido region, prepared by the Government and discussed in the technical report on the Tokyo-Shizuoka section of the expressway (TO-384a dated September 12, 1963), concluded that even with the new railway line and the new expressway, the probability of inadequate transport capacity in the Tokaido region by 1980 is considerably greater than that of excess capacity, unless additional facilities are initiated in the meantime.

(iii) Traffic on the Shizuoka-Toyokawa Expressway

36. The estimated future traffic on the Shizuoka-Toyokawa section of the expressway is based on detailed origin and destination studies made by Japanese authorities, and takes into account such factors as the growth in population, income, production, vehicle registration and traffic in general, and the benefits of using the expressway; the methods used are identical to those used for the other sections of the expressway. - 9 -

37. As shown in Table 9, average daily traffic on the Shizuoka-Toyokawa expressway in 1969, the opening year, is estimated at 18,000 vehicles, of which 12,300 would be trucks, 4,600 passenger cars, 600 buses and 500 miscel- laneous vehicles. This forecast assumes that between 1962 and 1969, truck traffic will grow by about 11 percent annually, bus traffic 10 percent and passenger cars by nearly 20 percent; the weighted average would be 11 percent. These increases are reasonable when compared with the growth of traffic in recent years, The vehicle tompositLon projected.in Table 9 is dif.Nrentfrom that exp&rtenced on the sections of the expressay recently onened to traffic where the proportion of trucks to nassen-er cars is more nearly equal3 however, as exnlained in paragraphs 17 and .15, the K,oden expects thecpronortion to., change to that forecat by 1969 when the w-hole expressvay lill be open to traffic. 38. About 85 percent of the traffic would be diverted from highways, primarily Highway No. 1, and 15 percent from the railways. The degree of diversion differs for different types of traffic; for example, virtually none of the freight traffic carried on small trucks will have been diverted from the railways, but about four-fiftlB of the bus traffic will be diverted railway traffic. Between 1969 and 1979, the annual traffic growth is estimated, on the average, to be about three-fourths of the 1962-69 rate; this is reasonable since highway transport in Japan is moving out of its early stages and cannot therefore be expected to continue at the high rates prevailing in the past. No allowance is made for traffic increases beyond 1979 since in that "year the expressway's theoretical capacity will be reached and additional capacity will be needed to avoid operation under congested conditions.

(iv) Specific Economic Benefits

39. The most important economic benefits of the expressway are reduced transport costs and time savings. The benefits from lower vehicle operating costs alone are estimated to bring a return on the investment of about 13 percent during its useful life of 30 years; an allowance for time savings for both passenger and freight would increase this to about 20 percent. These returns are reasonable and are similar to those on other sections of the Tokyo- Kobe Expressway.

40. If it should turn out that the future composition of the traffic will not be as estimated but remains as that on the section which is already open (see paragraph 16), the rates of return would be about one-fifth lower than those mentioned above (namely about 10% without time savings and 16% with), which would still be adequate.

41. Reduced Transport Costs. The expressway will reduce vehicle operating costs both for those who will use it as well as for those who continue to use existing highways on which congestion will be reduced substantially. The total benefits from reduced transport costs in 1969 are estimated at Y13.6 billion, of which about three-fourths go to the users of the expressway and one-fourth to those remai.ning on existing bighways8 - 10 -

42e Cn the basis of Japanese studies which appear reasonable and which are supported by actual figures obtained since the first expressway sections were opened to traffic, it can be estimated that the expressway will reduce the operating cost of an ordinary truck by about '21 per km,, or about 34 percent (US 6 cents equivalent); the savings for a bus would be about the same and for a small passenger car about 14 (see Table 10). These figures exclude special taxes, such as gasoline taxes, since they are not a cost to the economy; they also take into account thefact that between 1958, when the Japanese study of operating costs was made, and 1969, when the expressway will open, the degree of congestion of the existing highway will have grown so substantially that vehicle operating costs in 1969 will be at least 10 percent higher than they were in 1958. These savings per vehicle have been applied only to the traffic estimated to divert from other highways. For the traffic diverting from railways, separate calculations were made since the unit savings are, in general., only about one-half of those of the traffic diverted from highways. In addUtion, the expressway will reduce the congestion on National Highway No. 1 by reducing traffic volumes to about one-half of what they would otherwise be; this is estimated to reduce vehicle operating costs by about 15 percent.

43, Time Savings. In a country like Japan, where the labor force is fully employed, time is indeed money. The new expressway will reduce transport time for passengers and freight very substantially. The benefits from this in 1969 are estimated at about '6.8 billion, of which slightly more than half is for passenger traffic.

44. At the 1969 estimated traffic and congestion level, the travel time on the highway paralleling the new expressway will be about 3 hours for passenger cars; the expressway is estimated to reduce this to about 1 hour and 20 minutes. The reduction for buses and trucks would be from 4 hours to 1 hour and 40 minutes, Japanese studies relate the value of time for passengers to their earnings: about Y360 per hour for persons using passenger cars and Y72 for those in buses. The value of freight time saved is based on Japanese studies of what shippers are willing to pay for faster service because of such factors as reduced spoilage and the need for lower inventories; among the 12 classes of commodities studied, the value of saving one hour of transport ranges from ?75 (about US 20 cents) per ton of fresh fish and 1e50 for fruit to Y3.7 for minerals. (The validity of these data is discussed in detail in the appraisal report on the Tokyo-Shizuoko Expressway, TO-384a, September 12, 1963), The total benefit in 1969 would amount to about Y2 billion each for passengers and freight.

45. For the 10,000 passengers per day and the more than 8,000 trucks remaining on the existing highways, the reduced congestion means a saving of about 1 hour and 40 minute each. The value of this in 1969 would be about Yl.6 billion for passengers and Rl.2 billion for freight. - 11 -

46. Other Benefits. Other benefits include a considerable reduction in accidents and much greater corfort and convenience. The expressway will not significantly increase economic development in the sense that resources will be used which would otherwise remain undeveloped. However, the shift of new industries to the area around the expressway might permit resources to be used more productively there than in other areas. None of these benefits are included in the above rate of return calculations.

D. Financial Aspects

47. The specific sources of funds and tlle financial forecast for the Shizuoka-Toyokawa section of expressway are presented in Table 11. Toll charges will be the same as those prevailing on the section of expressway already opened to traffic, and are shown in Table 12. There is little difference in toll charges between passenger cars and small trucks, the average for such vehicles being about US cents 3i-4 per mile. The bulk of truck traffic expected to use the expressway is charged about US cents 5.2 per mile. Operating and maintenance costs have been estimated by the Kodan on the basis of past experience, and may be accepted as realistic and reliable.

48. On the above bases and with the traffic forecast as indicated in Table 9, the expressway is estimated to have a pay-back period of 20 years at the average interest rate of 6% now payable by the Kodan. If a more conservative estimate is made of traffic projection on the basis of equal proportions of passenger cars and trucks in the assumed volume of traffic using the expressway, the pay-back period would be extended from 20 to about 23 years. These pay-back periods are satisfactory. If the net income were expressed as a return on the net fixed assets of the expressway, it would yield 8% over an assumed operational life of 30 years.

49. The Kodan sets its toll charges at a level which is intended to recover, in the form of revenue, about a half to two-thirds of the total econo._ mic savings to the vehicles which use its facilities, If traffic volumes on the project expressway do not increase at a rate sufficient to produce toll charges adequate to amortize the total costs of the facilities at 6% per annum (the average cost of Kodan's borrowing) within a 30-year period, the Corporation would, in line with its existing policy and after consultation with the Ministries of Transportation and Construction, revise the level of toll charges accordingly. _ 12 -

III, CONCLUSIONS AND RECOIIEflDATIONS

50. The proposed project is the final section of the Tokyo-Nagoya-Kobe Expressway, the completion of which will alleviate a serious shortage in transportation capacity in one of the most densely populated and highly developed regions in Japan. The project is technically sound and is well justified both economically and financiaLly. The Borrower, Nihon Doro Kodan, is well known to the Bank and is considered fully capable of executing the project satisfactorily and of operating and maintaining it properly after completion.

51. During loan negotiations, matters connected with access roads, international competitive bidding and the arrangemenits for loan disbursement were discussed and agreed with the Borrower and the Government.

52. The proposed project provides a suitable basis for a Bank loan of US$75 million equivalent to the Nihon Doro Kodan. An appropriate term, analogous to the terms of the four previous loans, would be 25 years, including a 4 -3year period of grace.

Projects Department May 13, 1965 JAPAN: FIFTH EXPRESSWAY PROJECT

BANK FP3ANCING OF TOKYO-KOBE EXPRESSWAY

Loan Appraisal Length Total Bank % Partic- Loan Completion Ref. No. Report Not Expressway Section -(iiiT Cost 1 Loans ipation Signature Date

1 248-JA TO-236a Amagasaki-Ritto 72 125 40 32% 17 Mar 1960 Jul 1963

2 302-JA TO-300a (i) Nishinomiya Y-AmTagasaki 7 33 ) 40 23% 29 Nov 1961 Sep 1964 (ii) Ritto-Ichinomiya 104 141 ) Apr 1964-Sep 1964

3 357-JA TO-384a Tokyo-Shizuoka 161 515 75 15% 27 Sep 1963 Sep 1968-Apr 1969

4 374-JA TO-409a Toyokawa-Komaki 78 170 50 29% 22 Apr 1964 Sep 1968-Apr 1969

5 - TO- Shizuoka-Toyokawa 106 280 75 27% Tentatively Apr 1969 May 1965

- - - Komaki-Ichinomiya 8 22 - 0 - Jun 1965

Total: Tokyo-Kobe 536 1,286 280 22% Apr 1969

1/ Construction, right of way, and engineering only (excluding general administration, research, and interest during construction).

c The terminal interchange in the Kobe/Osaka metropolitan area.* CD Table 2

JAPAN: TIFTH EXPRESSWJAY PROJECT

FIVE-YEAR ROAD IMPROVEMENT PROGRAM, 196h-69

----- US$ Mill. Equiv.------Planned Government Classification Expenditure Participation

I. Toll Roads and Expressways

1. Nihon Doro Kodan 2,050 320 2. Tokyo Expressway Corporation 625 31 3. Hanshin Expressway Corporation 375 19

Total: Toll Roads 3,050 370

II. General Roadworks

1. National Highways 3,170 2,830 2. Principal Local Roads 1,270 850 3. Other Local Roads 1,450 960

Subtotal- 5,890 4,640 4. Snow clearance 108 78 5. Equipment 74 58 6. Survey and Engineering 28 25 7. Balance of Subsidy for Local Financing _ 89

Total: General Road-orks 6,100 4,890

III. Local Roads and Streets without Government Participation 2,200

GRAND TOTAL: 11,350 5,260

Source: Minigy bf Conrstruction JAPAN NIHON DORO KODAN SUMMARY STATEMENT OF REVENUES AND EXPENDITURE

Half-year Year ended March 31 ended -1957 September 30 1958 1959 1960 1961 -1962 1963 1964 19641 (Yen Millions) Operating revenues 264 477 894 1,09 2,327 3,354 4,793 8,349 5,997 ilon-operating revenues 11 58 48 91 268 182 201 281 386 375 535 942 1,500 2,595 3,536 4,994 8,630 6,383 Cash operating expenses 172 264 460 578 762 926 1,173 1,932 1,o46 Interest and bond discount 287 3941 900 1,188 1,728 1,722 2,177 4,870 41,295 Total cash outgoings 459 658 1,360 1,766 2,490 2,648 3,350 6,802 5,341 Net cash surplus or (deficit) (84) (123) (418) (266) 105 888 1,644 1,828 1,042 Other (non-cash) o erating expenses: Depreciation 3' 2 6 20 25 51 66 Periodic mainteriance and-renewals 69 138 97 equalization provision - - - - 14 14 23 41 21 Staoff retirement provision - - 27 - 19 24 27 44 17 2 6 117 25 84 104 119 223 135 Net surplus or (deficit) (86) (129) (465) (291) 21 781 1,525 1,605 907 Appropriations to reserves: For future loss of revenue - - - 69 113 161 For writing-off value of fa ilities 461 739 572 whiich become toll-free 5 26 52 67 184 477 1,031 1,492 2,379 1,5a1 Total appropriations 26 52 67 253 590 1,192 1,953 3,118 2,153 Net deficit as reported in accounts (112) (181) (532) (544) (569) (408) (1128) (1,513) (1,2L,6) Notes 1/ Principally interest on short-term investments and deposits. 2f/ Bond discount is less than 2% of the combined figure in each year. 3/ Depreciation only on parking places, service facilities asod otner fixed assets; excluding roads, bridges and / 5% of toll revenues in 1959/60 tunnels. and 1960/61: thereafter 10% of toll revenues, except expressways, which remain t/ Appropriation to reserve is equivalent 5%. to the total cf tihe net income earned during the accointing period by each individual toll facility wniun has an a;cuimulated not surnlus to itc credit. JAPAN - FIFTH EXPRESSWAY PROJECT NIHON DORO KODAN SU?UKARY BALANCE SHEETS

As at As at As at Marcch 31, 1963 March 31, 1964 September 30, 1964 JE.Fix8i Assets (Yen million) (a) In operation - Roads, bridges, 'tunnels--at cost 4/48433 103,528 /172,902 Parking places and service facilities ) Net of l,1ho 2,459 2,442 Other` fixed assets 3J ) depreciation 1,452 3,380 4,525 (b) Underi,onstruction 962886 97,889 53.110 Total Fixed Assets 1h7,911 207,256 232,979

II. Working CapiVal (a) Current assets 4, 6 45 5,379 8,127 (b) Deferred assets 4/ 950 1.111 1.033 5,595 6,490 9,160

Deduct: (c) Current liabilities 2,359 3,469 2,947 (d) Dcferred liabilities 375 561 592 2,734 40o30 3,539 Net Working Capital 2-861 2,460 5,621

III. Total Assets 150,772 209,716 238,600

IV. Long-term Debt

(a) Road Bonds 76,308 116,834 119,327 (b) Other long-term borrowing 42,584 50,279 69,773 Total Ling-term Debt 118,892 167,113 189,100

V. Government Equity

(a) Government investment 25,039 34,539 40,539 (b) Government grant for construction 5,496 5,496 5,h96 (c) Reserves 67 4,120 6,855 2/ 8,998 73d,73 -46,890 55,033 (d) Deduct: Deficit after appropriation to Reserves. 2,775 4,287 5,533 Total Govprnment Equity 31,880 42,603 49,500

VI. Total Capital Debt and Government Equity 150,772 209,716 238,600

Notes I/ i4aintenance and renewals chargeable to revenue. 2/- Reduced by Yen 383 million in respect of Torikai Bridge, written-off Kodan books in 1963/64 when it became free of tolls consequent upon its earned net income having repaid its construction costs. 3/ 3uil3in6s, vehicles, tools, etc. / Principally road bond discour,t and expenses for research. M/i'aintenaacc aqualization and staff retirement provisions. §/ Reserves for future loss of revenue and writing-off facilities which become toll-free. JAPAN: FIFTH EXPRESSWAY PROJECT NIHON DOROKODAN MP MEKIORANDUMACCOUNT OF TOLL REVENUES AND EXPENDITURES From April 1, 19 to March 31, 1964 (Unit, Thousand Yen)

Expenses

Names of Fapilities Revenues 2/ Surplus or NssiWe of RevenuesFa~iiee Interest Working 2/ Total Deficit

1. Nagoya-Kobe Expressway 1,1404,551 1,985,249 507,977 2,1493,226 -1,088,675 2. Aklkeshi F_W 19,696 8,594 26,417 35,011 -15,115 3. Sennini Tunnel 24,611 23,831 16,915 40,746 -16,135 4. Kayooka Highway 5,007 8,408 4,349 12,757 -7,750 5. Zao Highway 54,140 30,289 35,969 66,258 -12,118 6. Bandai-Azuma Highway 61,334 19,650 32,646 52,296 9,038 7. Kaimon Bridge 17,437 14,633 10,481 25,114 -7,677 8. Choshi Bridge 80,603 55,281 24,717 79,998 605 9. Sakai Bridge 4,044 3,438 2,207 5,645 -1,601 10. Nikko Highway 56,1400 11,103 23,140 34,243 22,157 11. Ikaho-Haruna Highway 714,308 35,120 28,523 63,643 10,665 12. Kamigo Bridge 85,136 10,034 20,195 30,229 54,907 13. Mefuki Bridge 72,634 19,232 30,916 50,148 22,486 14, Keiyo Highway 613,930 32,333 122,857 155,190 458,740 15. Yokohama Highway 743,783 51,100 166,464 217,564 526,219 16. Shonan Highway 94,790 11,242 33,678 44,920 49,870 17. Manazuru Highway 208,565 20,301 43,654 63,955 144,610 18. Hakone Highway 281,526 141,223 83,1410 224,633 56,893 19. Koshiji Bridge 9,072 8,919 9,314 18,233 -9,161 20. Sasago Tnnel 192,190 47,802 39,220 87,022 105,168 21. Higashi-Izu Highway 138,305 77,301 46,869 124,170 14,135 22. Togasayama Highway I 11,740 33,029 8,743 41,772 -30,032 23. Shimoda Highway i 42,516 10,638 17,834 28,472 14,044 24. Kakezuka Bridge 32,509 25,411 14,921 40,332 -7,823 25. Tateyama Highway 13,711 11,242 11,802 23,044 -9,333 26. Takefu Tunnel 119,895 11,428 41,196 52,624 67,271 27. Tsuruga Highway 86,796 55,003 25,446 80,449 6,347 28. Ogaki-Hajima Highway 25,268 54,770 17,909 72,679 -47,411 29. Nobi Bridge 108,668 29,359 23,666 53,025 55,643 30. Kinuura Bridge 61,1401 29,081 17,606 46,687 14,714 31. Aigi Highway 40,745 26,9944 17,335 44,279 -3,534 32. Isegami Tunnel 8,479 26,334o 9,078 35,418 -26,939 33. Sangu Highway 98,503 12,218 24,672 36,890 61,613 34. Meiyon Highway 351,107 178,526 72,889 251,415 99,692 35. Higashiyama Highway 16,955 15,888 12,845 28,733 -11,778. 36. Torikai Bridge 337,328 9,709 62,708 72,417 264,911' 37. Ajikawa Bridge 202,105 65,316 59,732 125,048 77,057 38. Akashi Ferry 130,339 23,924 102,914 126,838 3,501 39. Hanna Highway 325,102 59,555 85,086 144,641 180,461 40. Koyasan Highway 31,339 35,863 27,482 63,345 -32,006 41. Shirahama Highway 8,883 7,85i 4,384 12,235 -3,352 42. Daisen Highway 6,574 8,362 7,911 16,273 -9,699 43. Matsue Highway 38,496 17,142 14,715 31,857 6,639 44. Makunouchi Tunnel 21,113 9,895 10,902 20,797 316 45. Ondo Bridge 38,688 23,506 114,989 38,495 193o 46. Naruto Ferry 111,955 21,741 80,941 102,682 9,273 47. Higashi-Iyo Highway 26,470 20,719 12,583 33,302 -6,832 48. Chofu Highway 70,136 31,868 2b,b56 56,724 13,412 49. Kanmon Tunnel 751,1403 395,192 278,853 67h,045 77,358 50. Kita-Kyushu Hghway 153,305 125,195 47,1477 172,672 -19,367 51. Wakato Bridge 310,741 361,001 100,256 461,257 -150,516 52. Okawa Bridge 91,095 9,384 22,263 31,647 59,448 53. Suninoe Bridge 6,797 114,401 7,109 21,510 -14,713 54. Saikai Bridge 32,796 41,670 13,926 55,596 -22,800 55. Unzen Highway 26,607 17,328 11,357 28,685 -2,078 56. Shizabara Highway 25,351 30,660 13,172 43,832 -18,481 57. Aso Highway 46,559 9,802 .15,2147 25,o49 21,570 58. Nakanotani Tunnel 19,480 21,509 9,219 30,72C -11,248 59. Kirishima Highway 42,495 31,961 28,629 60,59c -18,095

Sub.Total 8,115,712 4,528,534 2,682,571 7,211,085 904,627

1. Zao Parking Place 5,732 790 3,365 4,155 1,577 2. Hibiya Parking Place I 194,283 64,294 100,476 164,770 29,513 3. Atagawa Parking Place | 1,463 836 1,421 2,257 - 7914 14. Nagahori Parking Place 19,822 48,267 63,173 111,440 -91,618

Sub-Total 221,300 114,187 168,435 282,622 -61,322

Otsu Service Area 33,662 2,787 7,534 I 10,321 23,341

Sub-Total 33,662 2,787 7,534 10,321 23,341

8 Grand Total .8,370,6714 14,6145,h88-2,85 ,5406 7,504,028 866,646-

Note: 1/ Bqcause of rounding, toLals do not always agree with the sum of individual items. %/ Also includes provision for contingency reserve for deficits. 3/ Interest and bond discount, 14,869,767 less Interest revenues 224,279. See Table 5, page ii. for Note on Accounting System Table 5 Page ii

JAPAN - FIFTH EXPRESSMAY PROJECT

NIHON DORO KODAN

Note on Accounting System

1. As each new facilitr is undertaken, its expected pay-back period is calculated on the basis of assumptions about traffic, rate of tolls, operation and maintenance expenditure, and a notional interest at the rate of 6 per cent on the unamortized balance of its cost. The facility becomes toll-free when it has earned surpluses sufficient to pay off its original cost.

20 Each year the total of interest paid (less interest charged to construction and interest revenues) is notionally charged to the various facilities in operation in proportion to their book value at the beginning of the year. If the toll revenue from a given facility is less than its operation and maintenance expenses plus its share of interest, the deficit is notionally added to its unamortized cost; any surplus is notionally deducted from the unamortized cost.

3. Some facilities produce more revenue than was forecast. In that case they become toll-free as soon as their cost has been fully amortized. Others fail to produce as much revenue as was expected, and so reach the end of the pay-back period with a balance of cost still unamortized. In order to write off such balances, Doro Kodan is building up a reserve, to which at present 10 per cent of the gross revenues of ordinary toll facilities and 5 per cent of Expressway revenues is credited.

4e The net surpluses earned by all facilities whose revenues have more than covered working costs, interest charges and appropriations to the foregoing reserve, are transferred to a reserve, described as "Depreciation Reserve". Against this reserve the construction cost of each facility will be written off at such time as the accumulated surplus equals the construction cost. The accumu'ated net deficits on the remainder of the facilities is carried forward in the Deficit Account, pending a development of revenues sufficient to liquidate the debit balance, or, if the end of the pay-back period should find a facility still in deficit, clearance of the balance by charge to the reserve described in paragraph 3. Table 6

JAPAN: FIFTH EXPRESSMTAY PROJECT

ESTIMATE OF PROJECT COST

I. Construction Cost Amount (payments to contractors and suppliers) (` billion)

1. Earthwork 17.7 2. Pavement 5.0 3. MIedian strip 1.3 4. Tunnels 7.0 5. Bridges 12.0 6. Viaducts 7.6 7. Flood Relief Openings 1.6 8. Access Facilities 2.6 9. Traffic Control Facilities 0.8 10. Preparatory Work including Haul Roads 1.2 11. IMiscellaneous Work 0.2 12. Provision for Contractorts Overheads and Profit 8.5 13. Appurtenant Works 1.7 14. Contingency Provision (approx. 10%) 6.2

Subtotal: Construc- tion 73.4 (73%)

II. Land Acquisition

1. Right-of-Way and Compensation 16.8 2. Contingency Provision (approx. 30%) 5.1

Subtotal: Land 21.9 (21%)

III. Other Field Costs

1. Survey, field administration, consultation, etc. 3.8 2. Unallocated contingency allowance 1.9

Subtotal: Field Costs 5.7 (6%)

TOTAL FIELD EXPENDITURE: 101.0 (100%)

IV. Associated-Research and General Administration 4.4

V. Interest.dring.Construction 10.5

TOTAL PROJECT COST: 115.9 (115%)

Source: Doro Kodan Table 7

JAPAN: FIFTH EXPRESSWAY PROJECT

FREIGHT TRAFFIC IN THE SHIZUOKA-TOYOKA.WA REGION, 9155-63

(Billions of ton/kn)

YEAR TOTAL RAILWAYS COASTAL STCIPPIN UKS

1955 7.7 4.9 2.0 o.8 1956 9.2 5.5 2.6 1.1

1957 9.9 5.7 2.7 1.5 1958 9.5 5.4 2.3 1.8 1959 10.9 5.9 2.9 2.1 1960 12.5 6.4 3.8 2,3

1961 14.2 7.0 h4. 3.2 1962 1h45 6.8 4.3 3.4 1963 16.8 7.2 5.0 h46

Source: Mihitsty:-&fof ansp-ortation Table 8

JAPAN: FIFTH EXPRESSWAY PROJECT

PASSENGER TRAFFIC IN THE SHIZNJOKA-TOYOUAWA REGION, 1955-63

(Billions of passenger/km)

YEAR TOTAL RAILIWAYS HIGHRA YS Buses Passenger Cars

1955 12.9 10.9 1.5 0.5 1956 14.5 11.7 2.2 o.6 1957 16.0 12.4 2.9 0.7 1958 17.1 13.1 3.2 o.8

1959 18.7 13.8 4.1 o.8

1960 20.9 15.3 4.7 0.9 1961 23,2 16.9 4.9 1.4 1962 25.7 18.4 5.7 1.6 1963 28.2 19,8 6.4 2.0

Source: Minist6f Transportation Table 9

JAPAN: FIFTH EXPRESSW4AY PROJECT

ESTIMATED AVERAGE DAILY TRAFFIC, SIIIZUOKA-TOYOKAWA EXPRESSWAY, 1969-79*

(Number of Vehicles)

YEAR TRUCKS BUSES PASSENGER CARS OTHERS TOTAL Ordinary Small Ordinary Small

1969 10,000 2,300 600 1,000 3,600 500 18,000

1974 13,600 2,800 800 1,100 7,300 600 26,200

1979 17,100 3,200 900 1,200 12,800 800 36,000

* For explanation of underlying assumptions see paragraph 37. The number of vehicles are the equivalent vehicles travelling the total length of the expresswiay. Traffic is assumed to remain at the 1979 level thereafter, since this is approximately the theoretical capacity of the expres sway.

Source: Ministry of Transportation JAPAN: FIFTH EXPRESSWAY PROJECT

COMPARISON OF OPERATING COSTS ON THE EXISTING HIGHIWAY AND THE SHIZUOKA-TOYOKAI^IA EXPRESSWAY, 1969* (Yen per vehicle/km)

PASSE N GE R CARS B U S E S T R U C K S

Ordinary Small Ordinary Small

Type of Cost Existing Express- Existing Express- Existing Express- Existing Express- Existing Express- Highway way Highway way Highway way Highway way Highway way Fuel and Oil 5.6 6.9 3.8 4.5 9.0 12.4 9.6 13.5 4.0 5.4 Tires 1.0 1.4 0.9 1.2 3.5 4.9 2.9 4.1 1.0 14 Maintenance 4.7 3.7 2.3 1.8 4.6 3.6 4.3 3.4 2.0 1.6 Depreciation 11.5 6.8 5.7 3.3 16.8 9.8 6.8 4.0 5.4 3.3 Wages - -- - 13.1 7.8 16.6 9.9 9.9 5.5 Overhead and Misc. 3.4 2.2 3.4 2.1 16.8 10.4 19.9 12.0 11.8 7.1 Subtotal, Operating Costs 26.2 21.0 16.1 12.9 63.8 48.9 60.1 46.9 34.1 24.3 Deduction for Taxes 8eO 7,0 3.1 2.9 5.9 6.9 4.4 6.9 3.1 3.3 Subtotal, Operating Costs Net of Taxes 18.2 141.0 13.0 10.0 57.9 42.0 55.7 40.0 31.0 21.0 Allowance for Increased Congestion after 1958* 1*8 - 1.0 - 5.1 - 5-3 - 3.0 -

Total 20.0 14.0 14.0 10.0 63.0 42.0 61.0 40.0 34.O 21.0 Cost Reduction: Absolute 6 4 21 21 13 % 30 29 33 34 38 .-

* For explanation see paragraphs 41 & 42. H

Source: Doro Kodan JAPANt FIFTH EXPRESSWAY PROJECT TABLE 11

SHIZUOKA-TOYOKAWA EXPRESSWAY

Application of Funds Source of Funds Construction Total Right of Way Research Interest Fiscal Project and and during , Government Road Years Cost Compensation Administration Construction Investment Bonds I.B.R.D.

(Yen billion) (Yen billion)

1963/64 0.1 o0, _ 0.1 1964/65 0.9 0.9 - - 0.1 0.8 1965/66 5.9 5.4 0.3 0.2 0.8 4.0 1.1 1966/67 27.9 25.6 1.1 1.2 3.5 18.0 6.4 1967/68 44.7 39.6 1.7 3.4 5.5 28.4 10.8 1968/69 36.4 29.5 1.2 5.7 , 4.7 23.0 8.7 115.9 101.0 14. 1i0.; 14.6 _7Z3 27.0

Estimated Income Account Forecast total number of vehicles Working X Surplus or Outstanding 2/ per day Revenues Expenses Interest - (Deficit) Balance

-(Yen billion)

1969/70 18,000 7.3 1.0 7.0 (0.7) 116.6 1970/71 7.9 1.0 7.0 (0.1) 116.7 1971/72 8.5 1.1 7.0 o_4 116.3 1972/73 9.1 1.1 7.0 1.0 115.3 1973/74 9.8 1.1 6.9 1.8 113.5 1974/75 26,000 10.5 1.7 6.8 2.0 111.5 1975/76 11.3 1.h 6.7 3.2 108.3 1976/77 12.2 1.3 6.5 4.h 103.9 1977/78 13.2 1.3 6.2 5.7 98.2 1978/79 14.0 1.5 5.9 6.6 91.6 1979/80 36,000 14.1 1.5 5.5 7.1 84.5 1980/81 14.1 2.1 5.1 6.9 77.6 1981/82 14.1 1.5 4.6 8.o 69.6 1982/83 14.1 1.7 4.2 8.2 61.4 1983/84 14.1 1.5 3.7 8.9 52.5 1984/85 36,000 14.1 1.6 3.1 9.4h3.1 1985/86 14.1 1.6 2.6 9.9 33.2 1986/87 14.1 2.2 2.0 9.9 23.3 1987/88 14.1 1.6 1.4 11.1 12.2 1988/89 14.1 2.1 0.7 11.3 0.9 1989/90 36,000 14.1 2.0 0.1 12.0 +11.1

1/ Interest at 6%. on balance --at beginning of year. 2/ In accordance with-Kodan- practice, outstanding balance is reduced by surplus and-increased by deficit. Table 12

JAPAN: FIFTH EXPRESSIWA'.'Y PROJECT

SHI.ZUOKL-TOYOIrAWA EXPRESS'HAY

SCHMEDLE OF PROPOSED TOLL CHARGES

Equivalent Yen US Cents 'Type of Vehicle per KM per mile

Passenger Cars Small 7.5 3 4 Ordinry 9.5 403

Trucks Small 7.5 3.4 Ordinary 11.5 5.2

Truck or tractor-trailer combinations with 3 axles 17.0 7.6 wAth 4 or more axles 22.0 9.9

Buses regular service 16.0 7.2 other 22.0 9.9 MAP 1 Wckkono .X

HOKKAIDO

420 JAPAN 42

NATIONAL HIGHWAY SYSTEM te

EXISTING PRIMARY Aom NATIONAL HIGHWAYS

FIRST, SECOND, THIRD AND FOURTH EXPRESSWAY PROJECTS

PROPOSED FIFTH EXPRESSWAY PROJECT

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