Japan has offered India funds for its first bullet train, estimated to cost $15 billion, at an interest rate of less than 1 per cent. India picked Tokyo to assess the feasibility of building the 505-kilometre corridor linking Mumbai with Ahmedabad.
While the project to build and supply the route will be put out to tender, Japan offering finance makes it clearly in the first place. China had won the contract last month to assess the feasibility of a high-speed rain between Delhi and Mumbai, a 1200 km route estimated to cost twice as much. Japan's decision to give free finance to Modi's project is part of its push back against China's involvement in infrastructure development in South Asia.
“There are several (players) offering the high-speed technology. But technology and funding together, we only have one offer. That is the Japanese,” said AK Mital, chairman of the Indian Railway Board, which manages the network. The two projects are part of a 'Diamond Qaudrilateral' of high speed trains over 10,000km of track that India wants to set up to connect Delhi, Mumbai, Chennai and Kolkata. Japan has offered to meet 80 per cent of the Mumbai-Ahmedabad project cost, on condition that India buys 30 percent of equipment including the coaches and locomotives from Japanese firms, officials said. “What complicates the process is Japanese linking funding to use of their technology. There must be tech transfer,” said Mital.
The Japanese International Cooperation Agency has declined to give out the details of its offer. A spokeswoman said, “The report has already been handed over to India, and the Indian government is now in the process of making a consideration.” Counsellor in the economic section of the Japanese embassy, Toshihiro Yamakoshi said that Japanese countries were keen to collaborate with their Indian counterparts on the rail projects as a part of Modi's Make In India programme.
“There is a lot of money involved in this. The different departments are weighing the implications. Should we be committing all our resources to a single high-speed line,” an Indian railway official said on condition of anonymity. “The railways have not attempted anything as big as this before in terms of costs.”
