China to offer aid for India high-speed rail study

NEW DELHI/SHANGHAI (Reuters) - China will conduct and pay for a feasibility study in India for a high-speed rail line to link Delhi with the southeast city of Chennai, a spokesman for India's Ministry of Railways said on Tuesday, as the country moves to modernise its creaking rail infrastructure.

China has been aggressively campaigning to export its high-speed rail technology, including to governments in Malaysia, Thailand and Myanmar, after building the world's longest domestic network in less than a decade. To date, it has won contracts to build rail lines in Saudi Arabia and Turkey.

The ministry spokesman gave no cost estimates for the proposed 1,750 kilometre (1,087 mile) line but a study for a high-speed 500-kilometre line between Mumbai and Ahmedabad being conducted by the Japan International Cooperation Agency estimated that project would cost 600 billion rupees ($9.70 billion).

A group of five Indian officials in China since Monday will sign an agreement with Chinese officials this week on the feasibility study, the spokesman said. That will be the first rail agreement between the two countries since Chinese President Xi Jinping, on a state visit to India in September, signed a memorandum of understanding to cooperate in railway development.

The new railways minister, Suresh Prabhu, is an aide to Prime Minister Narendra Modi with a reputation as an efficient administrator and who, the ministry spokesman said, has called for several projects including the Delhi-Chennai line to be expedited.

China's National Railway Administration and railway builder China Railway Construction Corp did not return calls seeking comment.

China Railway Construction's shares surged following an award this month of a $3.75 billion contract in Mexico to a consortium led by the state-run firm, although the deal was abruptly cancelled by the Mexican government just days later when it came under criticism from opposition lawmakers. The government is due to re-run the tender late this month.

India's British-built railways, the world's fourth largest, have laboured under years of inadequate investment and much of the network is now slow, badly congested and often cited as a symbol of how far Indian infrastructure lags China's.

Modi, who started out selling tea outside a train station, has promised to upgrade India's railways and to build a "diamond quadrilateral" of high-speed tracks linking key Indian cities.

(1 US dollar = 61.8700 rupees)

(Reporting by Tommy Wilkes in NEW DELHI and Brenda Goh in SHANGHAI)