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Should India spend Rs 60 thousand Crore on Bullet Train project?

New Delhi, 13 July-2014, ET: Two days after the rail budget, Satish Agnihotri, CMD, Rail Vikas Nigam, the PSU that oversees the Indian Railway’s infrastructure projects, invited four retired rail engineers for lunch. The food was simple — rice, roti and dal. But what the five men were about to discuss was complex: how to build India’s first bullet train. For an organization that is synonymous with sluggish trains, bullet trains are nothing short of a leap into the future for the Indian Railways. Bullet trains, or high-speed trains, are billed as the Railways’ dream project.

Should India spend Rs 60 thousand Crore on Bullet Train project?

Should India spend Rs 60 thousand Crore on Bullet Train project?

But they might as well be Prime Minister Narendra Modi’s too, given the frequency with which he promised to overhaul India’s rail infrastructure on the lines of Japan during the election campaign. So the sense of urgency that has taken over Agnihotri’s office located in New Delhi’s Bhikaji Cama Place since the government recently approved the high-speed rail corridor project between Mumbai and Ahmedabad, worth Rs 60,000 crore, is to be expected. Agnihotri is also chairman of High Speed Rail Corporation of India (HSRC), which is tasked with executing the project. One of Agnihotri’s four guests was a man named Rajiv Ranjan Jaruhar who retired as member (engineering) of Railway Board in 2007.

Jaruhar calls the bullet train a “mighty” project with no parallel. “The institution handling the high speed rail project must have an entirely different work culture, paradigm and philosophy,” he says. In other words, the Railways in its present form will be unable to execute the project. That is only one of the many challenges. Arunendra Kumar, chairman of Railway Board, the highest decision-making body of the railways, says technology adopted in high-speed rail is alien to India’s railway engineers. Nevertheless, the process of training over 300 rail men will begin this year itself.

“Yes, we have to start afresh. HSRC will have a corporate structure and independence, as private sector players as well as multilateral agencies are more comfortable with such a structure,” says Kumar. There is one factor that bodes well for the project — the new government’s intent. “Earlier we were told: let’s study the feasibility. Now the direction is: let’s do it,” Kumar says. Indeed, bullet trains as an idea is hardly new to India — as early as 2007-08, Lalu Prasad as rail minister envisaged trains running at 300-350 km an hour— but nothing came of it. But this time there is a change in attitude thanks to the NDA government getting a clear mandate, according to Kumar.

Chasing Bullet Dreams

Embracing the idea of bullet trains means the Railways will rid itself of a lobby that has always advocated enhancing train speed with minor changes. After Lalu Prasad’s announcement in the budget, the railways ministry approached 12 state governments for participating in pre-feasibility studies. Initially, nine gave an “in-principle” nod.

Should India spend Rs 60 thousand Crore on Bullet Train project?

In 2009, Railways’ Vision 2020 document reiterated the need for high-speed rail corridors. But the wide range of speed — 250 km to 350 km an hour — for the proposed bullet trains cast doubts if they would stay true to character. The fastest train in India now is the Shatabdi, which runs at 140 kmph. The record was previously held by Rajdhani Express, which clocks a speed of up to 130 kmph. The Rajdhani was unveiled in 1969, five years after Japan introduced Shinkansen, the world’s first bullet train that ran at 240 kmph, at that time. The world has moved on, with France, Spain, China, Germany, Italy, South Korea and Japan too boasting trains that zip at 300 kmph. India, in sharp contrast, has been stuck in a time warp for decades.

Risks Involved

No doubt, bullet trains are imperative to the Railways’ growth. But critics also question the gamble of creating infrastructure worth Rs 60,000 crore when the railways is strapped for cash. The government took a political risk by hiking rail fare by 14%, a move that led to street protests across India and prompting a rollback in Mumbai that will witness elections later this year. Even the hike will help the railways collect only `8,000 crore, or about oneeighth of what one bullet train project might gobble up.

Also, if the massive expansion of Chinese high-speed rail — at 12,000 km, it trumps Japan’s 2500 km and France’s 1,900 km projects — offers any lessons, it is this: India should be careful about splurging on bullet train projects. Most of China’s high-speed projects except those connected to key cities of Beijing and Shanghai, are likely to operate at huge losses for years, even decades, according to experts.

Coaxing the private sector to participate is a good idea. But question is will it, if the project is seen as not commercially attractive? NVS Reddy, MD of Hyderabad Metro Rail, currently building the world’s largest metro rail project in a public-private partnership, adds a word of caution. “Under the present railway setup where there are so many restrictions, private players are unlikely to come forward for such a big project. The project of modernizing railway stations under PPP was quite a viable project, but that itself did not materialize. Railways structures need to be liberalized,” he says.

(Input Source: Economic Times)

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