Friday, September 15, 2017

Bullet Train in India

This post will introduce you to the facts about the Bullet Train Project between Mumbai-Ahmedabad.

Bullet Train (image from internet)
With the inauguration of Bullet Train project between Mumbai-Ahmedabad, Indian Railways has started a new chapter with technological advancement.
Indian Railways is the biggest network of the world. Steadily with slow progress, the trains in India have been on track which has been less luck in past two years.
The concept of high-speed train was conceived somewhere in 2006-07. But was not finalized considering the huge infrastructural and running cost. The then government did not think to roll it.
Now in the Bharatiya Janta Party regime, PM Narendra Modi gave green signal to the project not to keep his promise but considering the 2019 general elections just around the corner.
Modi says that considering the loan of Rs. 88,000 crores which have been promised by Japan for this project of Rs. 1,10,000 crores should be considered to be free. India has to repay the same at the interest of 0.1% in a span of 50 years. But the amount which is being provided by Japan is 80% of the total cost of this project and rest Rs. 20,000 crores are to be furnished by the Centre. Here a question arises that why Mumbai-Ahmedabad leaving New Delhi which is the capital of the country. It is only to woo the people of Gujarat the home State of the PM.
According to Institute of Management Ahmedabad (IIM-A) who have done a detailed study regarding this project have apprehensions. The loan has to be repaid in 50 years starting from 15th years post operation of this project. IIM-A in its report critically analyses the operational cost along with the amount of loan. According to the report if the fare is Rs.1500 per person for 300 Kms, 15 years after the operation it will have to ferry 88,000 to 110,000 passengers on daily basis to ensure the repayment of loan and interest on time. This will require 100 trips up and down from Mumbai to Ahmedabad. Keep fingers crossed for the success of this project.
The fare would be somewhere Rs. 2782 per person for the distance of about 508 kms i.e. Mumbai-Ahmedabad to be covered in 2.07 hours, whereas the present fares are; by train Rs. 1855 (AC Sleeper class) for travel time 8 hrs 52 minutes and by air Rs. 1426 for travel time 1 hour 15 minutes. How many Indians will afford this exorbitant fare which is higher than airfare?      
Fares and Travel Time between Mumbai-Ahmedabad
Mode of Travel
Rs. 1855
8 hrs 52 minutes
Rs. 1426
1 hr 15 minutes
Bullet Train
Rs. 2782*
2.07 hrs
There are many things which one should think about this project; escalation in cost till the time of repayment of loan starts, availability of commuter for this costly train, etc. Who cares!
We should understand that Japan’s per capita income is $50,000 and India’s $1,500; are we standing anywhere near to compete with these developed nations! India will be debtor for 50 years, on a project which will be a failure as per today as the technology transfer is still in dark! 

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