Offering to finance India’s first bullet train which is estimated to cost USD 15 billion at an interest rate of less than 1 percent, Japan has edged out China to emerge as the frontrunner. China has been bidding for other projects on the world’s fourth-largest network.
China has been the dominant player in South Asia for infrastructure projects in the last few years and this latest development is seen as a part of a broader push back by Japan against China’s involvement in infrastructure projects in India. Japan, which was selected to assess the feasibility of building the 505-kilometre corridor linking Mumbai with Ahmedabad, concluded it would be technically and financially viable.
“There are several (players) offering the high-speed technology. But technology and funding together, we only have one offer. That is the Japanese,” said A. K. Mital, the chairman of the Indian Railway Board, which manages the network. Offering finance has made Japan the clear frontrunner in the project to build and supply the route, which will be put out to tender.
The bullet train between Mumbai and Ahmedabad is expected to cut down the travel time from 7 hours at present to 2 hours. The Mumbai-Ahmedabad corridor and the Delhi-Mumbai corridor are a part of the diamond quadrilateral connecting India’s top four metropolitan cities of Delhi, Mumbai, Kolkaata and Chennai. The Delhi-Mumbai project which is around 1,200 kms was awarded to China last month after it won the contract.
The terms and conditions imposed by Japan include an offering to meet 80 percent of Mumbai-Ahmedabad project cost, on condition that India buys 30 percent of equipment including the coaches and locomotives from Japanese firms, officials said.
India’s rail network which moves an estimated 23 million people a day has a poor track record in terms of providing safety to commuters apart from slow speed. India’s railways is in need of funding and modernisation. Critics of bullet trains argue that instead of spending billions on a bullet train, India would do well to spend the same amount on modernising its creaky railway system.
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