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Central Japan Railway may target Floriday bullet train deal

(Reuters circulated the following story by Nobuhiro Kubo on January 25, 2010.)

TOKYO —Central Japan Railway Co (JR Tokai) (9022.T) will join rivals in competing to develop a high-speed railway line in the U.S. state of Florida, as the former state-owned firm looks to sell its super-fast train systems overseas.

A consulting firm hired by the company said a railway line connecting Tampa, Orlando and Miami in Florida was one of the most promising targets for its Shinkansen bullet trains as the route would be exclusively used by high-speed trains.

"I expect competition for the contract to be fierce in Florida. We will be the last to join the bidding," JR Tokai's Chairman Yoshiyuki Kasai told a news conference. "But I believe our Japanese system will be the most suitable for the line."

Kasai did not say which other firms were competing for deal, although JR Tokai's global rivals include Canada's Bombardier (BBDb.TO), Germany's Siemens (SIEGn.DE) and France's Alstom (ALSO.PA).

U.S.-Japan High-Speed Rail, the consulting firm working for JR Tokai, also said that lines between Las Vegas and Los Angeles could be candidates for the company's products.

The world's $165 billion rail market is expected to grow by 2.0-2.5 percent a year until 2016, according to European Rail Industry trade group UNIFE.

The United States' railway market is typically viewed as one of the most promising as President Barack Obama's economic stimulus package includes an $8 billion provision for high-speed trains.

GOOD SAFETY RECORD

"The company's European rivals are competitive and have more experience in selling railway technology overseas," said Ryouta Himeno, transport analyst at Mitsubishi UFJ Securities. "But the good reputation of JR Tokai's bullet trains in terms of safety and punctuality should work to their advantage."

JR Tokai operates Shinkansen bullet trains between Tokyo and Osaka, one of six regional railway operators that were set up after Japan's national railway was privatised in 1987. Shinkansen trains have not suffered any fatal accidents since they started operating in 1964.

The railway company is also keen to sell its know-how on so-called maglev trains, which levitate and are propelled forward by magnetic force. It has already put in motion a 5 trillion yen project to build a maglev railway connecting Tokyo and Nagoya.

JR Tokai said it sees lines between Baltimore and Washington, as well as from Chattanooga to Atlanta as potential candidates for this technology, which allows trains to travel at 500 kilometres per hour, nearly twice as fast as normal Shinkansen.

Shares of JR Tokai, which replaced Japan Airlines Corp (9205.T) on the Nikkei Average after JAL last week filed for bankruptcy, rose 0.9 percent, while the the Nikkei Average was down 0.7 percent.

Monday, January 25, 2010

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