Metro Rail News December 2016

An agreement on the Rs 98,000
crore bullet train between
Mumbai and Ahmedabad is
the highlight of Japanese Prime
Minister Shinzo Abe’s visit to
India. The project will be
financed with a 50-year yen
loan at 0.1 percent, which
includes a moratorium on
interest payments for the first
20 years.
Railway Minister Suresh
Prabhu’s aides say the train
will be viable with rates that
are one-and-a-half times the
current AC first class fares, or
nearly Rs 3,000. That is Rs 6
per km.
Viability will depend on traffic
and the frequency of service.
Rail officials say there is
enough between the two cities:
trains are chockfull and flights
are packed. At 300-350 kmph,
the distance should be licked
in less than two hours. This
will create additional demand.
With quick visits possible,
more people will travel.
Earners might persuade their
families to relocate outside
expensive and congested
Mumbai.
Financial Rate of Return
The Japanese International
Cooperation Agency (JICA),
the aides say, has estimated
the financial rate of return at
4.4 percent a year. This is less
than the yield on government
bonds. But the economic rate
of return – or the impact on the
economy – is estimated at 13
percent annually.
Fares alone will not be enough.
Japanese bullet trains are
cross-subsidised by revenue
from property development.
India’s bullet train corporation
should be able to skim the
increased land value it will
create along the route through
industrial enclaves and
townships.
The project will take two-anda-half
years to plan and eight
years to complete.
Though Japanese financial
terms seem fetching, they may
not actually be so. Former
railway official Ved Mani
Tiwari who, until August, was
director of Kochi Metro Rail,
found the dollar to be the most
stable over a 40-year period,
with annualised volatility of
4.5 percent. The currencies
constituting the Euro yo-yoed
by 6.5 percent while the yen
swung the most at 9.5 percent
annually.
India May End Up Paying
More
If the Japanese loan for the
bullet train is ‘tied’ and India
can only buy Japanese
equipment it might pay more
than it should. Japanese
electric engines for the
Japanese-financed western
freight corridor cost more than
Rs 50 crore each. Alstom India
has undertaken to supply
ARTICLES |
higher capacity (12,000 hp)
electrical engines with
maintenance thrown in from
its Madhepura plant for Rs 24
crore each.
Making Travel Efficient
As India’s economy grows and
people’s income goes up, it
will need an efficient way of
moving large number of
people quickly over long
distances. It cannot depend on
air travel alone for reasons of
energy efficiency and climate
change. Trains use one-fifth
the energy of airplanes and the
carbon emission per passenger
is much lower.
The Railways have already
conducted studies to examine
the viability of six high-speed
rail routes. These are:
Delhi–Chandigarh–Amritsar
(450 km)
Pune–Mumbai–Ahmedabad
(650 km)
Hyderabad–Dornakal–
Vijaywada–Chennai (664 km)
Chennai–Bangalore–
Coimbatore–Ernakulam (649
km)
Howrah–Haldia (135 km) and
Delhi–Agra–Lucknow–
Varanasi–Patna (991 km).
But if funds were finite and
India had to choose between
rail services that would give
the biggest bang for money, it
would opt for elevated 200
kmph semi-high speed trains
connecting the metros with
satellite cities that would make
quick getaways possible.
Metro Rail News | December 2016 | www.metrorailnews.in 41