Japan to drop operational safety clause for railways procurement: EPA negotiations

In the on-going negotiations between Japan and the EU, Japan has proposed to drop the operational safety clause for transportation. The clause was long seen by EU railway companies as a non-tariff barrier preventing them to do viable business in Japan.  

The proposal would force government entities such as Tokyo Metro, city transport organisations in designates cities, JR Hokkaido, JR Kyushu and JR Shikoku to tender large contracts under international public procurement rules.  The proposal is said to include a transitional period to ease its impact.

For the three largest JR companies, JR East, JR West and JR Tokai, scrapping the clause will make little difference as the EU ended its opposition to the exclusion of these privatised companies from the public procurement framework in the fall of last year.  As these three companies cover the majority of the public transport market in Japan, the impact of the proposal is regarded as limited, although some worries are expressed about price competition if more EU companies will take part. The impact is likely to decrease further as the Japanese government is also preparing privatisation more JR companies, with JR Kyushu scheduled to go to the market in two years.


Source: Kyodo (J) , Saga Shinbun (J)

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