To finance the country’s first bullet train from Mumbai to Ahmedabad, the Japan International Cooperation Agency has agreed to provide a loan of about Rs 79,380 crore, with all components, even those to be sourced from Japanese companies, to be manufactured in India.
The soft loan will amount to 81 per cent of the total project cost of Rs 98,000 crore. On the sidelines of a Make in India Week event Sunday, A K Mittal, Chairman of the Railway Board, said the loan would have a tenure of 15 years and a moratorium of another 15 years,
and come at an interest rate of 0.1 per cent.
“The bullet train will be an exemplary Make in India project. Less than 20 per cent of the components required for the bullet train would be sourced from Japan, and even those would be manufactured by their companies in India,” Mittal said.
He added that senior officials from the Japan government had a meeting with Arvind Panagariya, Vice-Chairman of NITI Aayog, Sunday to discuss and review the project.
Japan also had a country investment seminar on Sunday as part of the Make in India Week. While senior government officials hailed Japanese participation in financing Indian infrastructure such as the Delhi Metro, the Delhi Mumbai Industrial Corridor and the bullet train, they expressed a grouse that Japan was not manufacturing enough in India.
Amitabh Kant, Secretary, Department for Policy and Promotion (DIPP), said, “Japan has financed the Delhi Metro, but the coaches are not by Japanese companies. They are by Bombardier or Alstom. Japan does not manufacture coaches here. The future is not in Japan, the future is in India. Japanese companies need to relocate their manufacturing to India, make India their hub for exports.”
The Mumbai-Ahmedabad bullet train, the latest mega infrastructure project in India to be financed by Japan, will be 508 kilometres long and run at a speed of 300-350 kmph.
With the Indian Railways still in the process of acquiring land and getting clearances, Mittal said, the project was not likely to commence until late 2017 or early 2018.
The Union government is also keen on locating the Mumbai station of the bullet train at Bandra-Kurla Complex, despite the state government having expressed reservations.
The government had earlier said it would be unable to allot a plot in Bandra Kurla Complex, which commands a very high property price and funds the state’s ambitious infrastructure projects. The Maharashtra government had said it needed the land to develop the business district as an international financial centre.
“The feasibility report had suggested Dadar, Kurla and Thane as alternatives, but Bandra Kurla Complex was identified as the best possible location. The station would be three levels below the ground, keeping the surface level free for the government to use. Moreover, having a bullet train station will only drive up the business district’s valuations further,” Mittal said, adding that the Union government was still in talks with the state to work out a solution.