Bullet Trains can change Tier-II Cities of India into Suburbs of Metros: CRB

Railway infrastructure upgrade got a big boost with an agreement signed between India and Japan for the Mumbai-Ahmedabad bullet train. AK Mittal, Chairman of the Railway Board, gave out his views on how this project will roll out.

Outline for us the complete bullet train infrastructure plan, where Mumbai-Ahmedabad is just one corridor, where Japan is investing

The Indian Railways presently operates trains that are up to only 150 kmph. High-speed involves trains running over 250 kmph. Most advanced countries have a high-speed network. A distance of 500-700 km is covered within a time period of 2.5 hours or so. The advantage is that is absolutely safe, low cost compared to airlines, energy efficient, eco friendly and has large carrying capacity compared to roads. A high speed network can also transform tier-II and tier-III cities into suburbs of the big cities.

This is also a new model for funding large-scale infra. For the Mumbai-Ahmedabad corridor 80 per cent will be done by Japanese financial agencies with the balance raised by the Railways. So how will the Railways raise the 20 per cent?

Eight-one per cent of the funding is coming from Japan at very concessional terms. The term loan period is 50 years, with a moratorium of 15 years and with an interest rate of 0.1 per cent. These are terms that India has not got from any other country or even Japan has not given to any other country in the past. So, this speaks of our relationship with Japan. The technology that we are going to get is one of the best in the world — it is absolutely safe with no accident history in the last 50 years. This project will be executed over seven years. Arranging the funds for the balance ₹18,000 crore over this time frame is not difficult. Moreover, it will be the Government of India funding. We will also speak to the States of Maharashtra and Gujarat and ask them to participate.

Which are the other bullet train projects that the Railway Ministry may be looking at? Which are the corridors that may be looked at?

Ultimately we are going to connect all the metropolitan cities by the high speed corridors. All the four metropolitan diagonals and quadrilateral lines will be connected by high-speed rail. The first corridor is 508 km between Mumbai and Ahmedabad. Ultimately, all these six corridors will be around 10,000 km but that is quite some time away.

Is there any timeframe that the Railway Ministry may be looking at for the completion of all the corridors and the diamond quadrilateral?

We are still at the feasibility stage for other corridors. The first feasibility study which was completed in July was taken on a very expeditious basis to finalise this deal with Japan. We will take it forward on a fast-track basis.

For other corridors, first let us examine the feasibility report and then we will come to the other issues.

By when will the construction actually begin in the Mumbai-Ahmedabad corridor?

We have to still form a company, and then a structure and some other studies are to be done. We will take it forward very fast and the construction should start in another one-and-a-half years.

What form will the company take?

This will be an SPV (special purpose vehicle) with the participation of Government of India as well as the two States. We still have to decide on the stake of each of the partners but the bulk of it will be the Government of India. We still have to have dialogues with them to decide the contours of this sharing.

For the component sourcing for this particular project, will we see a large network of outsourced components in the initial phase?

Let me give you the broad breakup. The total project cost is ₹70,000 crore. Since it is executed over seven years, the completion cost becomes around ₹98,000 crore, taking into account inflation, escalations, interest over a period of time, etc. Now, out of ₹70,000 crore, more than ₹50,000 crore is civil cost, civil structure cost which definitely is going to go Indian companies.

Then comes core technology components like signalling systems, other communications systems, train protection systems. In the beginning core technology equipment will be imported from Japan, which will be around ₹12,000 crore. Then there will be some elements of the project where we will need Japanese expertise. There the contractor or the lead partner may be Japanese, so this is the structure in the beginning.

In the MoU signed with the Japanese government, it has an element of Make in India. It means even in the core technology items — including signalling, train production, operational systems and rolling stocks — there will be an element of Make in India and progressively they will be manufactured in India. (Courtest: Bloomberg TV)

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