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Monorail to start in August, financial health worried

Date Posted: 2003-06-07

Okinawa's public transportation enters into a completely new phase August 10, when Okinawa monorail starting commercial operations, but money is already an issue.

The 12.9 km long monorail links Naha Airport and Shuri. The trains are scheduled to travel the stretch in 27 minutes. The basic fare is 200 and increases by 30 every three kilometers. The fare for the entire line is 290.

Monorail company managers are already worried about money. No monorail in Japan has ever made a profit, and many believe that Okinawa monorail is no exception. The Okinawa monorail company has been modeled after Kita-Kyushu monorail, which has been in business since 1985. That venture was supposed to turn its first profit in 2002, but the Kita-Kyushu monorail ended the year 26.2 billion in red, despite the fact that Kita-Kyushu has a population 20 times of Naha.

Okinawa monorail planners expect their venture to operate in the red the first 27 years, and see its first profit in 2031. That calculation, though, assumes that a minimum of 31,000 passengers use the monorail daily, an assumption that many people believe is wildly optimistic.

Most Okinawan families own a car, with many having two, and people are accustomed to using their own means of transportation. That is one reason why Okinawan bus companies have great difficulties staying in business.

The construction cost of the Okinawa monorail was 112.8 billion, and although most of the cost was paid by a state subsidy, the company is still saddled with 35 billion of debt. The company expects about five percent of its revenues to come from billboard and other advertising in the trains and stations. About 95 percent will come from ticket sales.

The company also expects to attract customers from bus companies, and agreed to pay the bus operators 2.4 billion compensation.

Roughly 85 percent of Okinawa's commuters use their own cars. Directors at the monorail say that if ten percent of drivers switch to using monorail and leave their cars home, the company will generate 16 billion a year profit. But even that is not so simple, as the question arises where those people would park their cars while using the monorail.

The basic challenge monorail managers are facing is how to change people's attitudes. "We have to manage to change Okinawan people's mindset, otherwise we can never make the monorail profitable," one of the company's directors said in a recent interview.

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