Shooting in the dark: 

Shooting in the dark: 

Context

The Bullet train Project which is very much in news, needs to be evaluated considering all its dimensions to figure out whether it is a project that would be expensive to maintain and difficult to dispose off or will it leap-frog India into a new era of advanced technology.

Background

• Japan introduced its high-speed Shinkansen line between Tokyo and Osaka as long ago as 1964.
• Its top speed then was 210 km/hr; it’s now 350 km/hr.
• Since the first Bullet Train made its debut, 10 other countries have developed a high-speed network, the biggest being China’s
• Other countries with high-speed trains include France, Germany, Italy, Spain, South Korea and even Turkey.
• None of them uses the Shinkansen system

What remains unchecked?

• Since none of the countries uses the Shinakansen system, does it imply that it is the best available technology.
• There seems to have been no technical evaluation comparing other available systems.
• So it might be so that India is embarking on such a huge project on the basis of blind faith.

How did India put its faith on a technology that has not been evaluated?

• There was no technical evaluation and no transfer of technology agreement, but there was a viability report
• No one knows the details of the viability report because officialdom has refused to share the report even in response to RTI applications
• However, there is the example of Taiwan which installed the Japanese Shinkansen system.
• In the early 1990s, a consortium of private companies was formed to install a high-speed train system on a Build, Operate and Transfer (BOT) model which by end failed and finally the Taiwanese government had to bail out the consortium.
• In India, the BOT model was not even floated as a trial balloon for the very good reason that no private company would have bid for the project — the failure of the much less capital-intensive Metro project (BOT) is very much on everyone’s mind.

How is this project a threat to India?

• The Japanese are giving a 50-year loan of Rs 88,000 crore of the total project cost of Rs 1,10,000 crore, the rest coming from the central government and state governments of Gujarat and Maharashtra.
• If the interest rate offered to India of 0.10 per cent sounds benign, consider this: The interest rate on 10-year Japanese government bonds is 0.04 per cent and other interest rates can even be negative.
• if we consider average Indian inflation at three per cent, and Japanese at zero per cent, the rupee will depreciate three per cent every year vis-a-vis the Japanese yen. So over 50 years, the sum to be repaid will not be Rs 88,000 crore but could be well over twice that amount.
• 95 per cent of rail users in India do not use even the Rajdhani or Shatabdi trains. So only five per cent of Indians use our present super-fast trains because they find the extra fares beyond them. In short, bullet trains are going to make travel faster for five per cent of the population, which already has the option of air travel.

How is this project beneficial to India?

• The raw materials and the labor for the project will be provided from India
• Everything that needs to be used in the project, right from services to provisions, will have a great potential of creating revenue
• The Bullet Train project is going to cost Rs 1,10,000 crore; in last year’s rail budget, the total outlay for the entire Indian railway system was Rs 1,21,000 crore.
• The Bullet Train will serve a small percentage of people travelling between two cities; the Indian railway system, with over 13,000 trains running every day, carries more than eight billion passengers per year plus 1,000 million tonnes of freight over the whole country.
• The cost for the two, as the figures show, is virtually the same.