IR

An Interview with the President

Question 3
Under "JR East Group Management Vision V—Ever Onward" you have positioned "Eternal Mission" and "Pursuing Unlimited Potential" as the two important pillars. Could you please explain "Eternal Mission" in a little more detail?
Answer
We will make persistent efforts to properly answer the expectations of society for the Group by following three courses of action: "Pursuing ‘extreme safety levels’," "Service quality reforms" and "Strengthening collaboration with local communities."

In essence, our "Eternal Mission" is to provide safe and high-quality transportation services that contribute to the growth and prosperity of communities. This fundamental mission must be fulfilled at all times. We have worked on this priority under past management visions. However, we have once again positioned this mission as a key tenet of management. We will work to further strengthen and broaden our efforts in this respect.

Perfecting safety is an eternal pursuit. Throughout our 140-year long history in railway operations, we have steadily built up railway safety through steadfast daily efforts. This work will continue forever into the future. We will strive to achieve "extreme safety levels" by continuing our steadfast efforts to maintain and improve safety.

We have implemented steady and systematic seismic reinforcement work in preparation for major earthquakes, most notably by seismically reinforcing more than 40,000 viaduct columns since the Great Hanshin-Awaji Earthquake, which struck in 1995. These measures have paid off. During the Great East Japan Earthquake in 2011, there were no derailment incidents on Shinkansen routes in commercial operation and no collapse of viaduct columns.

Besides countermeasures based on experience from the Great East Japan Earthquake, we are now promoting seismic reinforcement and other countermeasures against a possible earthquake directly beneath the Tokyo metropolitan area, and other major earthquakes in Japan, at a total cost of approximately ¥300 billion, positioning the five-year period (from fiscal 2013 to fiscal 2017) as an intensive implementation period. In addition to viaduct columns, we have expanded the scope of seismic reinforcement and other countermeasures to include embankments, cutouts, electrical poles, station and platform ceilings and other infrastructure. Efforts will also be made to strengthen the seismic observation system such as by installing more seismometers.

Although a massive amount of investment will be needed, we will steadily implement measures to address all foreseeable risks with the view to building extremely safe railways. We are particularly focused on building a railway capable of withstanding natural disasters. In doing so, we believe that such a railway will serve as a crucial factor underpinning JR East’s revenues over the medium and long terms.

We will accelerate the installation of automatic platform gates for the Yamanote Line as a safety measure for station platforms. By fiscal 2016, automatic platform gates will steadily enter service at 23 stations, excluding the stations where major renovations are scheduled. Ridership on the Yamanote Line accounts for a particularly large share of JR East’s customers, and the Yamanote Line is a hub for the entire Tokyo area railway network, including those of other railway operators. By giving priority to safety measures on the Yamanote Line, we believe that we can contribute to railway transportation safety in the Tokyo metropolitan area as a whole.TETSURO TOMITA, President and CEO

In railway operations, securing safety is a top priority. However, we believe that safety alone is not enough. While ensuring safety, we must also seek to provide reliable and comfortable transportation services. This is why we are pursuing "service quality reforms." First, we will do our utmost to prevent any disruption in our transportation operations. When accidents or other incidents occur, we must work to contain the impact and to resume operations as soon as possible, such as by rapidly providing shuttle operations. We will reform service quality through teamwork that cuts across divisional and organizational barriers, to achieve our goal of becoming No. 1 in customer satisfaction in the railway industry. Enhancing the railway transportation network is another key element of service quality reforms. When we begin operation of the Tohoku Through Line in fiscal 2015, which will enable passengers to take the Joban, Utsunomiya and Takasaki lines to Tokyo Station and areas served by the Tokaido Line, we will eliminate the need for passengers to transfer trains at Ueno Station as they do now. This will have the beneficial impact of reducing travel time by about 11 minutes and alleviating congestion during commuting hours. By putting this sort of seamless, direct service in place, we plan to improve the quality of transportation services. In the intercity network, we expect to increase passenger flows between the Tokyo metropolitan area and Hokuriku and Hokkaido, as well as between the northern Tohoku region and Hokkaido, by opening the Hokuriku Shinkansen Line to Kanazawa at the end of fiscal 2015 and launching the Hokkaido Shinkansen to Shin-Hakodate (provisional name) at the end of fiscal 2016. This will help to spur regional economic development, while improving the value of our railway operations in line with the concept of "Thriving with Communities."

Another crucial management priority is strengthening collaboration with local communities. In particular, we seek to harness the power of tourism to revitalize the disaster-hit regions, and by extension Japan as a whole. In fiscal 2014, we will conduct Destination Campaigns for Sendai and Miyagi Prefecture, and Akita Prefecture. We will work closely with local communities to attract large numbers of visitors to the Tohoku region. Measures will include uncovering tourism resources and disseminating information. In other initiatives, JR East will progressively introduce new-concept trains that people seek to board for the "ride" itself, such as restaurant trains and steam locomotive trains. Through these initiatives, we hope to expand railway travel options and stimulate tourism. Another key theme for strengthening collaboration with local communities is to develop towns centered on railway stations. We aim to transform large-scale station terminal buildings into appealing destinations in their own right that attract visitors, not merely places where people get on or off trains or transfer between them. One prime example is Tokyo Station, where preservation and restoration work on the Tokyo Station Marunouchi Building was completed in October 2012. As with Tokyo Station, we will promote town development by transforming train stations such as Shinagawa, Shibuya, Shinjuku, Yokohama, Chiba and Sendai, and having the beneficial impact of these stations ripple out to revitalize the surrounding towns and spur the development of the local community. In addition, in core regional cities, we will concentrate various facilities in and around railway stations and in line-side areas to serve communities. These facilities will include housing, nursing care, medical, and child-rearing facilities that meet the needs of people’s daily lives.

We also have an important mission to help revitalize local industries. Our efforts are particularly focused on selling locally produced goods in the Tokyo metropolitan area, mainly by hosting farmers’ markets for more than 2,000 days every year at Tokyo metropolitan area railway stations and other locations, as well as at the NOMONO shop for selling local produce in Ueno Station. We plan to open our second NOMONO shop after the Ueno Station location by the end of fiscal 2014. Furthermore, in regard to the sextic industrialization of primary industry, we are implementing measures such as supporting Akita Shokusai Produce, which sells local produce from Akita Prefecture in the Tokyo metropolitan area. In addition, we established A-FACTORY, which produces cider in Aomori Prefecture. Looking ahead, we will continue to expand these sorts of initiatives with the view to revitalizing regional economies and helping to create new employment in local communities.