Monday, February 22, 2016

FRONTLINE, 4 March 2016
Shizuo KambayashiAPA file photo of the Shinkansen high-speed train as it heads for Tokyo.

The cost of land acquisition, loan repayment and subsidies could render the proposed bullet train project with Japanese cooperation a white elephant. By K.P. FABIAN and SKAND TAYAL

WHEN Japanese Prime Minister Shinzo Abe visited India in December 2015, a memorandum of understanding was signed between the two countries to start a high-speed train service between Mumbai and Ahmedabad, covering a distance of 508 kilometres and running at a speed of 250 km per hour. Currently, the journey takes six hours by train and about 70 minutes by air. The estimated cost (taking into account inflation and interest) will be Rs.97,600 crore, and Japan will provide a soft loan of Rs.79,000 crore at less than 1 per cent interest, payable in instalments over 50 years, for the project. Work will start in about 18 months and, according to Railway Board Chairman A.K. Mittal, the project will take seven years to complete. He also stated that in due course, the four metropolitan cities of Delhi, Mumbai, Kolkata and Chennai would be connected by high-speed trains, both sideways and diagonally, with the total length adding up to 10,000 km. The Mumbai-Ahmedabad sector will cost Rs.180 crore per route km. The cost for 10,000 km works out to Rs.18 lakh crore, which is 9.5 times the Indian Railways’ earnings for 2015-16 (Rs.1,88,556 crore).

The civil construction for the Mumbai-Ahmedabad sector will cost about Rs.50,000 crore and is to be done by Indian companies. Equipment worth Rs.12,000 crore is expected to be imported from Japan and Japanese experts will have to be paid for their service.

There has been some debate in the media on the project, at times on partisan lines. Those who want to support the ruling party that had included the introduction of high-speed trains in its election manifesto have praised the project, while others who are opposed to the ruling party have criticised it. With a few exceptions, none of the commentators has appraised the project in a holistic manner.

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