The decision to put on hold the Rs 35,000 crore project, which was to be implemented over a five-year period, was taken during a Rail Budget discussion at the Prime Ministers office (PMO) earlier this week.
Speaking to FE, official sources said that Prime Minister Manmohan Singh and Planning Commission deputy chairman Montek Singh Ahluwalia were of the view that instead of embarking on a new project, the governments limited resources should be used to upgrade existing infrastructure. Electrification of tracks, implementation of safety measures and double-laning were some of the areas identified for immediate action.
As a first step in the implementation of the bullet train project, railway minister Lalu Prasad was supposed to introduce a high-speed corridor in the forthcoming Rail Budget connecting Mumbai and Ahmedabad. The corridor would have allowed trains to run at a speed of 250-300 km per hour.
Japan, which is a pioneer in bullet trains, had expressed its interest in funding the project and a detailed project report was under preparation.
Sources said that although the project would have been funded by foreign investments, the government would have had to provide at least the viability funding for it. The PMO wants that all available resources should be used for improving the present infrastructure and reducing the number of rail accidents, the official said.
The ministry was keen on the project as it believes that high-speed trains reflect the engineering capabilities of Indian industry. Some in the ministry feel that the railways is not so choked for funds now as earlier.