Full coverage: Modi, Abe kick off India's first bullet train but several hurdles remain

Is the bullet train financially viable? BS decodes

Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe on Thursday laid the  foundation stone for the proposed Ahmedabad-Mumbai High-Speed Rail Network, commonly known as the bullet train, in the Gujarat city.

"My good friend Prime Minister Narendra Modi is a far-sighted leader. He took a decision two years ago to bring high-speed train in India and to create a new India," he said.

"I hope to enjoy the beautiful scenery of India through the windows of the bullet train when I come back here in a few years," said Shinzo Abe after laying the foundation stone.

Around Rs 1.10 lakh crore will be spent on the project that is being partially funded by Japan. Out of the Rs 1,10,000 crore, Japan is giving a loan of Rs 88,000 crore. The interest on this loan is minimal at 0.1 per cent and it is to be repaid in 50 years, with a grace period of 15 years.

The train will stop at each of the 12 railway stations on the route, but only for 165 seconds. A 21-km-long tunnel will be dug between Boisar and BKC in Mumbai, of which seven km will be under water. 


 

35 trains a day: India to get its first bullet train by 2022

The Centre is confident of starting the Ahmedabad-Mumbai bullet train on August 15, 2022, to commemorate the 75th year of India's Independence, a year ahead of its schedule.Initially, the route is expected to have 35 trains per day. This might increase to 105 by 2050. Read all the details here. 

However, land acquisition could be a major hurdle for the project
Acquiring 825 hectares of land may become a major hurdle for the completing the Mumbai-Ahmedabad bullet train project by 2022.Experts said advancing the project’s deadline by a year to August 2022 may not be feasible considering the complex land acquisition process involved. Of the Rs 1.10 lakh crore investment required for the project, Japan is providing Rs 88,000 crore as a soft loan at 0.1 per cent interest. However, release of the Japanese funding is linked to land acquisition.

Initial feasibility reports have identified 163 villages in eight districts of Gujarat, 44 villages in three districts of Maharashtra and some areas in Dadra and Nagar Haveli for land acquisition. About 2,761 families will be affected. More details on that here

And is the travel on a bullet train really affordable? 

Though the fare structure for Rs 1.10 lakh crore is yet to be finalised, the initial estimates suggest that the high-speed rail fares are likely to be 1.5 times the existing first class AC train tickets. The current fare of AC first class on Ahmedabad-Mumbai route is in the range of Rs 1,700-2,300, while flight tickets start from Rs 2,000 onwards. This means a traveller will have to pay much more than existing flight ticket prices to travel on bullet trains. Read more here

Is the project economically and financially viable?

In an otherwise investment starved economy, this is an example of routing low-cost surplus capital available globally to build infrastructure in the country. Similar to the Delhi Metro Rail Corporation becoming a consultant to metro rail projects across the country, if successful, this project could play a similar role for HSR. Gaining experience of under-sea tunnels and advanced signalling technology could be added benefits, writes Neelkanth Mishra. Read his analysis here where he also debates if there will be  15 million passengers a year willing to travel in a train at the targeted Rs 2,500-3,000 ticket price?

The launch of the bullet train could lead to Modi’s pet project, Gujarat International Finance Tec-City (GIFT) City, losing its competitive edge as an upcoming financial centre, say experts as the rise in connectivity could result in commercial activities getting centralised to the larger centre. Secondly, the Mumbai-Ahmedabad bullet train project would have to ferry 50,000 passengers to and fro to earn enough to repay the loans with interest on time. Read more about its financial viability and what it means for GIFT City here. 

But how about getting rail safety right first?

The inauguration of the signature bullet train project comes just weeks after a major accident of the Utkal Express at Khatauli, Uttar Pradesh, with 23 fatalities. The derailment of the Utkal Express, an entirely avoidable tragedy, followed a series of accidents, big and small, this year and finally resulted in Suresh Prabhu being moved out of the railway ministry and the resignation of the Railway Board chairman, A K Mittal. As new Railway Minister Piyush Goyal and Railway Board Chairman Ashwani Lohani get ready to oversee India’s entry into a club of countries that offer high-end mass transport services, ordinary rail travel has become an increasingly hazardous exercise for the average Indian. What has gone wrong? Read our in-depth analysis here

China also keen in high-speed railway projects in India

Even China has evinced interest in reviving its proposal to build high-speed railway projects in India, which has chosen Japan as a partner for the country's first such venture.China has been aggressively marketing its high-speed rail technology abroad and in the past lobbied hard to get the first contract in India. It had taken up a feasibility study for the New Delhi-Chennai corridor but no headway has been made in this regard so far.The Chinese side showed interest in the projects in India as Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe prepared to lay the foundation for India's first bullet train project. More details here