India has told Japan that tenders for electrical and signalling systems, as well as the rolling stock, for the Mumbai-Ahmedabad high-speed rail corridor should be floated without delay as land issues faced by the project appear to have been resolved.
Sources said that Japan and India have agreed to put a cap on the cost of the systems and rolling stock, and that if the prices for these quoted by Japanese companies go beyond that cap, the balance will be footed by the Japanese side, outside the scope of the loan agreement for the project.
This puts to rest a longstanding impasse that the project has faced, with prices for many of the critical items to be supplied by Japanese companies indicated to be up to 90 per cent higher than project consultants’ estimates.
The Japanese government’s Japan International Cooperation Agency is covering 80 per cent of the cost of the bullet train project with a soft loan to India that compels the project to source critical components only from Japanese suppliers. The project is expected to cost Rs 1.6 lakh crore.
Officials estimate that the Gujarat portion of the corridor will be fully operational by 2027, followed by the Maharashtra portion by 2029.
“Since there is a cap agreed by both parties, and since civil works are now being executed at a fast pace, there is no roadblock to floating the systems tenders for the Japanese firms,” a source said.
In the sixth meeting of the Joint Working Group for the Mumbai-Ahmedabad High Speed Project, the Indian side communicated to their Japanese counterparts that the tenders for the systems, especially the electricals and signalling, should be awarded by December-March, it was learnt.
The meeting, held earlier this month, was co-chaired by V K Tripathi, the chairman and CEO of the Railway Board, and Satoshi Suzuki, the Japanese ambassador.
In a major sign that the project may finally be able to put its land-related troubles in Maharashtra behind it, the National High Speed Rail Corporation, the implementing agency of the project, on Friday floated the tender for the 21-km tunnel in the state. Seven kilometres of the tunnel will be under the sea.
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The Indian Express had last month reported that the project was getting its land-acquisition issues sorted out under the new government in Maharashtra.
The tunnel is the most complex piece of civil engineering work in the 502-km corridor. The tender for the tunnel is open to global competition, with both Japanese and Indian companies allowed to tie up with other international players to make bids.
Another area of concern for the project was the procurement of the rolling stock — the actual train sets. As per Japan, only Kawasaki and Hitachi are eligible to supply the rolling stock. Sources said the Indian side had wanted to avoid a situation where both the companies jointly submit a bid, which could raise the price.
However, with a price cap being agreed by both sides, this concern has been alleviated.