TOKYO BAY MEGA- FLOATTeam 1- Taylor, Vicki, Jeremy, and LukePM3320November 3, 2014

INTRODUCTION• Eighty percent of land in Japan is mountainous and plains between them are

close to completely populated with residential and business buildings. Making room for huge projects like airports is becoming increasingly difficult.

• As a result, Japan has had to “think outside the box” and has done so by reclaiming shallow waters around its coastline with “filler” projects; Tokyo and Chiba are notable examples. But the attempt to create “floating runways” is a novel idea and required a lot of technical and scientific analysis to design, build and test.

HISTORY• The Mega-Float is a very large floating structure up to about five kilometers long

intended to be used as a floating airport, container terminal or other port facilities, leisure island, for factories, etc.

• Research and development on the Mega-Float have been undertaken as a national project by the Technological Research Association of Mega-Float (TRAM) and participating shipbuilding and steel-making companies, with direction of Japan’s Ministry of Land Infrastructure and Transport (MOLT).

• The research and development of the Mega-Float have been undertaken in 2 stages: Phase-1 from 1995 to 1998 addressing general and possibly undetermined problems which might be involved with VLFS; and Phase-2 from 1998-2001, focusing on specialized research for a floating airport

IMPORTANCE OF VALUE MANAGEMENT P.1

• The importance of value management when dealing with a task suck as one of the world’s most challenging construction/engineering design in the world. Value Management plays a huge part in this by bringing added value and timely solutions. This was done by proactive participation, investment, management in promising spheres of business surrounding the core construction business, as opposed to focusing solely on basic construction tasks.

• By using a variety of financial strategies such as a Consolidated Balance Sheet, Consolidated Statement of income, Consolidated Statement of changes in Net Assets, Independent Auditor’s Report, Enhancing Sustainable Development, Investor information, and Major Project Completions makes the value of Management a critical piece of making this Runway a reality. By doing these things it keeps investors on the right track to keep on investing in the value of this project and in the value of Management.

IMPORTANCE OF VALUE MANAGEMENT P.2

• Value Management is very important when three designs are presented in making the new runway not interrupt the water flow of the Mega-Float. 1st design being Pile –supported structure. This is a runway built on cement pile driven cement rods. The 2nd design being a combination of reclamation and pile-supported (hybrid concept) this is two different pile driven structures linked together by flexible joints and the 3rd idea being a floating structure which then deals with movement of ocean while small aircraft are landing and taking off.

PROJECT PLAN P.1• Step 1: Project Goals• Step 2: Project Deliverables• Step 3: Project Schedule• Step 4: Supporting Plans(Duncan Haughey, 2012)

PROJECT PLAN P.2

FORMS OF BORROWING: COST OF EQUITY, DEBT, AND CAPITAL

P.1• Cost of equity: In finance, the cost of equity is the return (often expressed as a rate of

return) a firm theoretically pays to its equity investors, i.e., shareholders, to compensate for the risk they undertake by investing their capital.

• Cost of debt: The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; however, because interest expense is deductible, the after-tax cost is seen most often.

• Cost of capital: In financial economics, the cost of capital is the cost of a company's funds (both debt and equity), or, from an investor's point of view "the shareholder's required return on a portfolio company's existing securities". It is used to evaluate new projects of a company.

FORMS OF BORROWING: COST OF EQUITY, DEBT, AND CAPITAL

P.2• Tokyo's third airport will be a floating structure built in Tokyo Bay. A major

airport constructed in this fashion is estimated to cost approximately $9.6 billion and take 4 to 5 years to build. As a comparison, New Kansai International Airport in Osaka, which was built on reclaimed land and opened in 1994, took seven years to construct and cost $13.5 billion.

MEZZANINE DEBT/ SENIOR DEBT P.1

• Mezzanine financing is basically debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. It is generally subordinated to debt provided by senior lenders such as banks and venture capital companies.

• In finance, senior debt, frequently issued in the form of senior notes or referred to as senior loans, is debt that takes priority over other unsecured or otherwise more "junior" debt owed by the issuer. Senior debt has greater seniority in the issuer's capital structure than subordinated debt.

MEZZANINE DEBT/ SENIOR DEBT P.2

• The construction phase began in 1998 and, thanks to the extensive R&D program, was completed in late 1999 at the cost of $149 million. (for each of the major six sections)

• took seven years to construct and cost $13.5 billion.

DISMANTLING

• Financial backers of the Mega-Float project see the technology used to construct floating edifices such as hotels, recreational facilities, garbage collection stations and even entire communities. (Anybody else wonder whether Kevin Costner is a financial backer?)

• While these structures will still require a sheltered location, there are many sites in every continent that might accommodate expansion into the sea. Advantages of floating structure development are:

• Almost all sheltered sea areas can be utilized regardless of depth and condition of subsoil,• Earthquakes have relatively little impact on floating structures, although tsunamis (large waves

caused by earthquakes) may be a problem in unsheltered areas of Japan and other countries,• Floating structures do not change the ecosystem and, therefore, have little negative impact on the

environment,• Construction costs and time to complete are less for floating structures than building similar

structures on reclaimed land,• Floating structures can easily be extended, and Floating structures can be relocated to another site

if required.

CONCLUSION• The Tokyo Bay Mega float project was terminated in 1998 but the

information and experience gained during the project’s lifetime and research have led to more plans for building floating airports. Mega float Phase II is now being planned for Yokosuka City in Kanagawa Prefecture and involves the same size structure tested in Tokyo harbor.

REFERENCESReferences• By, M. J. (1995, Oct 06). Floating airports considered in U.S., japan. Wall Street Journal Retrieved

from http://search.proquest.com/docview/308201678?accountid=27655• By, M. M. (1995, Oct 04). Floating airports are considered in U.S., japan; but will they fly? Asian Wall

Street Journal Retrieved from http://search.proquest.com/docview/315656222?accountid=27655 • Cubbin, K. A. (2006, June). Fantasy Island. Retrieved from Megafloat -- Floating Runway Built on the

Ocean in Japan: http://kcubbin.tripod.com/id24.html • Duncan Haughey, P. (2012). Project Planning a Step by Step Guide. Retrieved from Project Smart:

http://www.projectsmart.co.uk/project-planning-step-by-step.php • Schilling, D. R. (2013, May 17). The World’s Largest Floating Airport, Tokyo Bay’s Megafloat.

Retrieved from Industry Tap: http://www.industrytap.com/worlds-largest-floating-airport-in-tokyo-bay/3684

• Gigantic floating structure completed off yokosuka. (1999, Aug 04). Jiji Press English News Service Retrieved from http://search.proquest.com/docview/448733488?accountid=27655