Tuesday, August 26, 2014

China and Japan in competition for India’s lucrative High Speed Rail network market

 New Delhi:  China and Japan are once again in competition, this time for the lucrative high speed rail network market in India.
The Japanese are already working on a feasibility study for the Shinkansen network on the Ahmedabad-Mumbai corridor, the results of which will be shared with the Indian side in the run-up to the PM’s visit to Japan this weekend. Japanese Prime Minister Shinzo Abe is expected to make a strong pitch for India to buy the Shinkansen high speed network. Kyoto, where Modi lands on Saturday, has the best known Shinkansen connection with Tokyo.

Meanwhile, China, which now has the longest high-speed rail network in the world, is keen to sell their trains to India, at a price much lower than the Japanese. The Chinese president, Xi Jinping, will arrive for his maiden visit to India in mid-September.
Japan is hardselling better quality and higher safety standards, while China is pitching lower costs.
According to officials familiar with developments, Japan, at present enjoys a slight edge largely due to its safety record. China has had at least one spectacular high speed rail accident, killing hundreds. However, the Shinkansen’s cost is prohibitively high, and despite having a fail-proof safety and speed system for almost half a century, Japan has not had great success in selling it overseas.
However, a new Japanese entity, International High-Speed Rail Association, comprising all the companies that build high speed railways in Japan will try to convince India about its product in October, said officials. Given the projected cost for each train at around Rs 60,000 crore (as announced by railway minister Sadananda Gowda in his railway budget speech) officials said Japan can sweeten the offer with a better financial deal, including FDI.
China has been sounded out on upgrading India’s ageing and inefficient railways infrastructure, even building new stations. But the prize is the bullet trains because they are outright buys. China, which plans to have 19,000 km under high speed rail network from its present 11,000 by 2015, is now looking for private investment into the railway sector. Thus far, it has been funded solely by the government. But Chinese premier Li Keqiang announced on Sunday that henceforth China’s railway growth, which he sees as essential for China’s development would have to come from private sources.
India is planning to build high speed train networks on other routes such as Delhi-Agra, Delhi-Chandigarh, Mysore-Bangalore-Chennai, Mumbai-Goa, Secunderabad-Vijayawada-Chennai and Secunderabad-Bangalore.


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