PPP in Japan’s railway system – a success story

Public private partnerships for railways in Japan are different from those in other countries. Many railway lines in Japan are profitable and can easily generate enough revenues, so that there is no need for either the public sector to pay subsidies, nor for the private sector to invest money in public railways. However, due to declining passenger numbers in some areas, this model does not work anymore. In this paper the Japanese model of PPP is described, where the public sector takes over private railways to prevent them from being closed. The authors describe the main principles and the reasons of successful PPP-projects in Japan.