FORTUNE — Thanks to magnetic levitation (maglev), train transport has finally caught up with our dreams of futuristic, 21st century travel. Japan is about to augment its busiest route, Tokyo to Osaka, with a maglev service and is now looking sell its tech know-how abroad. Its latest overseas target is the New York to Washington corridor. If a loose consortium of pro-maglev Japanese and Americans is successful, a service competing with airline speeds could be running somewhere along the northeast route within the first half of this century.
Since maglev is an eye-watering, expensive alternative to conventional rail, requiring new, tech-heavy lines that can punch through mountains, the Japanese have felt compelled to offer a massive sweetener to Americans. Japan’s state-owned overseas investment bank, the JBIC, is committing funding, while Japanese Prime Minister Shinzo Abe made the gesture to President Obama that his country will gift the technology — valued at $5 billion — necessary to get the first leg off the ground. JBIC is backing that agreement and will stump up another potential $5 billion in construction costs if the route becomes reality, but the project is too premature, JBIC said in a statement, to promise an exact figure.
“As plans are just preliminary for the American maglev system, there is nothing concrete agreed as regards a cost estimate,” Tadashi Maeda, senior managing director of JBIC in charge of the financing to the project told Fortune. But the bottom line is that Japan will cover 50% of the cost at the initial stage, i.e., Washington to Baltimore. “However,” he added, “the project will need a major undertaking from the U.S. if it is to become a reality.”
Maeda confirmed that the maglev guideway and propulsion system would be provided free for the 40-mile Washington-Baltimore link by the creators of the Tokyo-Osaka maglev line, the Central Japan Railway Company (JR Central).
The hope is that development of the Washington-Baltimore segment would entice investors to finance the rest of the line between Baltimore and New York. Only when this is done can the route expect to be profitable, says Maeda, given the sizable population along the Baltimore to New York route.
The project’s American backers, the Northeast Maglev (TNEM) based in Washington, D.C., say that they are working closely with JR Central, which will offer technology and training to American manufacturers.
“For the first phase of the project, from Washington, D.C. to Baltimore, we will be looking at a combination of public and private funding, in addition to the financial support received from JBIC,” says TNEM CEO Wayne L. Rogers, who is an experienced investor in renewable energy projects. “We anticipate the cost of the first phase, from Washington, D.C. to Baltimore, to be north of $10 billion. It is too early in the project to provide a cost estimate for the full length of the line to New York. Final project costs will depend on the route selected.”
With high population density along the route, the JBIC and TNEM insist the route could be profitable. Maeda, however, expressed reservations over the lack of federal funds in economically straitened times for such projects and the lack of involvement of U.S. industry leaders such as Amtrak. “The project needs proper commitment,” he says.
Without the mind-boggling population density found in the crowded Japanese coasts and the revenues that promises, projects like these often require government subsidies. JR Central recently announced that it would be building its Tokyo to Osaka maglev service without taxpayers’ help. JR Central is privately funding the construction cost of the first leg, which will operate at 311 miles per hour to connect Tokyo and Nagoya in just 40 minutes. Passing along the most densely populated crust of Earth ever traversed by man, there will be massive demand and returns on investment, say analysts, despite the project’s long gestation period. The Osaka Tokyo “Chuo Line” won’t open till 2045.
“The Chuo Linear maglev project, which we estimate at Y9.5 trillion total cost (around $93 billion) will likely result in a 2050 recurring profit no higher than the start of this decade,” says Nicholas Cunningham, a Tokyo-based transport analyst at Macquarie Group.
Despite their best efforts, TNEM has a steep hill to climb without serious backing from the Japanese or deep-pocketed investors. So far, TNEM says it has raised $40 million from private U.S. investors. It will all come down to the numbers, says an editorial in sustainable transportation magazine EVworld.com. “Should this nation [the U.S.] make this level of investment? On the face of it, the answer is probably no, at least not until those mega-regions like the Boston-D.C. corridor, have population densities comparable to Japan or China, which could justify the expense,” says the editorial. “First, we need to get Amtrak’s Acela running at its full potential of 150 mph, instead of it current average of 80 mph. Then let’s consider something more 21st century like high-speed rail.”