September 14, 2017 7:46 pm JST

PM Modi and Japan's Abe launch Indian shinkansen project

$17bn railway expected to serve 15 million a year, create thousands of jobs

KIRAN SHARMA, Nikkei staff writer

Japanese Prime Minister Shinzo Abe, left, and his Indian counterpart, Narendra Modi, celebrate the beginning of construction on a high-speed rail project in Ahmadabad, India on Sept. 14. (Photo by Yuji Kuronuma)

NEW DELHI -- India on Thursday inched closer to its dream of getting a bullet train when Japan's Prime Minister Shinzo Abe and his Indian counterpart, Narendra Modi, laid the foundation stone for the country's first high-speed rail link based on Japan's famed shinkansen technology. 

"It's a historic day today, with a new chapter beginning in the relationship between the two countries," Abe said, speaking in Japanese, at a ceremony to mark the start of work on the 1.08 trillion-rupee ($16.8 billion) project -- 81% of which is to be financed by soft loans from Japan -- in the western city of Ahmedabad, in Modi's home state of Gujarat. 

"A strong India is in Japan's interest, and a strong Japan is in India's interest," Abe said. The Japanese prime minister, who arrived Gujarat on Wednesday for a two-day visit, described the partnership between the two countries as special, strategic and global.

He added that Japan is committed to supporting "Make in India" -- a campaign to turn the country into a manufacturing hub. Japanese industries will work with India to give a boost to manufacturing, he said.

Make in India is one of the primary drivers of the high-speed rail link, which will also ensure that most of the money invested in the project will be spent in the country. The construction sector will get "a big boost not only in terms of investment but also with respect to new technology and work culture," the Indian government said in a statement this week.

The bullet train will connect Ahmedabad, the commercial capital of Gujarat, with India's financial hub of Mumbai in neighboring Maharashtra state, cutting the 7- to 8-hour, 508km journey to just 2 to 3 hours.

The project's completion is set for December 2023, but the Indian government now wants to have it done by Aug. 15, 2022, the 75th anniversary of India's independence from British rule, and has vowed to make "all-out efforts" to meet that timetable.

 "I hope to enjoy the beauty of India through the windows of a bullet train when I come to India in a few years," Abe said.

Soft loans

Japan is providing a highly concessional loan of about 880 billion rupees at a minuscule interest rate of 0.1%. Repayments, spread out over 50 years, are to begin 15 years after the loan is received.

This, New Delhi feels, makes it practically free. "It is the first time in the history of the country that an infrastructure project is being funded on such favorable terms," its statement said.

In his remarks at the launch ceremony, Modi said: "With this project, Japan has demonstrated that it is a strong partner of India."

Modi expressed his gratitude to Japan for providing India with the financial assistance and technology for the project. "This will give a boost to Make in India and create thousands of opportunities for direct and indirect employment."

Modi, who became Prime Minister in May 2014, is keen to improve India's crumbling rail network, and has repeatedly highlighted the need to modernize the sector and turn it into an engine of economic growth. In 2015, his government unveiled plans to invest 8.5 trillion rupees in the country's railways over five years.

Accelerating infrastructure development is vital to boosting growth, and the railway network, which has had few upgrades in more than a century, is at the top of his to-do list.

India's first rail line was built in 1853, when the country was under British rule. Today, Indian Railways employs more than 1.3 million people, with 12,000 trains carrying more than 23 million passengers a day. Another 7,000 trains haul about 3 million tons of freight daily.

Safety

A government white paper issued in 2015 noted that Indian Railways, which is managed by the Ministry of Railways rather than a listed state-owned company, lacks the resources to improve customer satisfaction and introduce new technology. Investments in safety have also been inadequate, the report said.

Shinkansen technology is known for its reliability and safety, with a track record of more than 50 years. The average delay for a shinkansen train is less than a minute, and there has never been a passenger fatality on a bullet train. The Indian government has high hopes the project will provide reliable and comfortable service, with high safety standards.

"Technology regarding disaster prediction and prevention, will also be acquired as a part of the [bullet train] project," the government statement said, adding such systems ensure that safety is maintained in the event of a natural disaster such as an earthquake.

Job creation

With a maximum operating speed of 320kph, the bullet train project, which includes a 7km undersea tunnel, is expected to serve 15 million travelers a year.

It is also forecast to generate employment for 20,000 people during construction of the railway. Workers will be trained specially for such projects in India. Some areas where new construction skills will be developed are ballast-free track and undersea tunnels.

The project is expected to create another 4,000 direct jobs in operations and 20,000 indirect ones.

Abe and Modi also laid the foundation stone for a high-speed rail training institute that is being set up in the city of Vadodara in Gujarat. The institute, which will be equipped with simulators and other facilities, is scheduled to be up and running by the end of 2020. It will help train about 4,000 people in a three year program on the operation and maintenance of bullet trains. In addition, 300 Indian Railways officials are being trained in high-speed railway technology.

India hopes the Japanese technology will help it become part of the cutting edge in high-speed rail.

The government is reviewing several other corridors that are expected to see bullet train lines in the future, including connections between New Delhi and big cities such as Kolkata, Mumbai, Chennai, Chandigarh and Nagpur.

The technical assistance offered by Japan on the Ahmedabad-Mumbai bullet train project "will ensure complete transfer of know-how to Indians for future projects," the Indian government statement said.

China, too, is keen to develop high-speed rail networks in India. Although a consortium of companies led by its national train operator won a contract to conduct a feasibility study for a high-speed rail link between Delhi and Mumbai, it has yet to make a much headway in the sector in India.

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