Japan offers loan for Indian rail link
Print Edition
JAPAN has offered to finance India’s first bullet train, estimated to cost US$15 billion, at an interest rate of less than 1 percent, officials said.
Tokyo was picked to assess the feasibility of building a 505-kilometer corridor linking Mumbai with Ahmedabad, the commercial capital of Prime Minister Narendra Modi’s home state, and concluded it would be technically and financially viable.
The project to build and supply the route will be put out to tender, but offering finance makes Japan the clear frontrunner.
Last month, China won the contract to assess the feasibility of a high-speed train between Delhi and Mumbai, a 1,200-kilometer route estimated to cost twice as much. No loan has yet been offered.
“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.
The two projects are part of a “Diamond Qaudrilateral” of high-speed trains over 10,000 kilometers of track that India wants to set up connecting Delhi, Mumbai, Chennai and Kolkata.
Japan has offered to meet 80 percent 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.
Japan’s International Cooperation Agency, which led the feasibility survey, said the journey time between Mumbai and Ahmedabad would be cut to two hours from seven. The route will require 11 new tunnels including one under the sea near Mumbai.
“What complicates the process is Japanese linking funding to the use of their technology. There must be tech transfer,” said Mital.
JICA declined to comment on its offer. “The report has already been handed over to India, and the Indian government is now in the process of making a consideration,” a spokeswoman said.
Toshihiro Yamakoshi, counsellor in the economic section of the Japanese embassy, said Japanese companies were keen to collaborate with their Indian counterparts on the rail project as part of Modi’s Make-in-India program. He said it was too early to provide details of the cooperation.
Tokyo recently lost out to China on a contract to build Indonesia’s first fast-train link.
Beijing offered US$5 billion in loans without asking for guarantees, an Indonesian official said, ending a months-long battle to build the line linking Jakarta with the textile hub of Bandung.
Japan’s NHK broadcaster quoted Transport Minister Keiichi Ishii as saying that Prime Minister Shinzo Abe had instructed him to step up exports of transport systems to India and Southeast Asia.
“It is very regrettable that a high-speed railway project in Indonesia was awarded to China,” he said.
China won the Delhi-Mumbai survey after securing clearance from Indian security agencies long worried about China’s involvement in Indian infrastructure.
India’s cabinet will take a decision on the Japanese proposal over the next few weeks, an Indian railway official said. He said there were concerns about whether the billions of dollars required for high-speed rail might be more usefully spent in modernizing the railway system.
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