1. Why is the bullet train OK for China, but not for Narendra Modi’s India?

Why is the bullet train OK for China, but not for Narendra Modi’s India?

Most of those who never tire of praising China’s infrastructure and its massive rollout, including 22,000 km of a bullet train network, but feel it is too expensive for India will do well to keep in mind China first started planning bullet trains when its income levels were far below what India’s are today.

By: | New Delhi | Updated: September 12, 2017 6:35 PM
Bullet train. India, Japan, PM Narendra Modi, centre, PM Shinzo Abe The increase in convenience, the rise in land prices away from big cities and reduced congestion in big cities is the payback that the bullet train has to be measured against – a lower carbon footprint as more renewables are used to power it is another externality. (Representative image from Indian Railways)

Most of those who never tire of praising China’s infrastructure and its massive rollout, including 22,000 km of a bullet train network, but feel it is too expensive for India will do well to keep in mind China first started planning bullet trains when its income levels were far below what India’s are today. Even if you ignore the fact that China first started planning bullet trains in the 1990s and just look at the date when construction first began – December 1, 2003 – of the 2,078-km Shanghai-Wuhan-Chengdu line, China’s per capita income was under $1,300; today, when India starts construction of the Ahmedabad-Mumbai stretch, its per capita income is over $1,800. The other objection, that looks more relevant now with the recent spate of accidents, is that the Rs 1 lakh crore that the first stretch will cost is better spent on upgrading Railway safety, from new tracks to new coaches; indeed, since more people use the normal Railway network, there is more social good by doing so; linked to this is the issue of the high costs of running the bullet train network and whether it will ever break-even.

Both questions are incorrect, designed to give you a certain kind of answer. For one, the Japanese soft loan of around Rs 90,000 crore is not available for upgrading the current network – so the choice is to take the loan and build the bullet train or to not take it and do nothing. The Japanese government has given other soft loans, such as for the western Dedicated Freight Corridor, but don’t assume one loan can be used for another purpose. A 0.1% interest with a 15-year moratorium makes it very cheap and though costs rise to 3-5% once you include the cost of hedging the currency risk, it is still quite cheap.

Though the Jaica feasibility report had indicated the project would be viable at 1.5-2 times the current 2AC fares, this was based on a traffic volume that looks really high, at least right now. But keep in mind that almost no big infrastructure projects are viable on the basis of just the fares. When it was conceived, Delhi’s Metro was very expensive, especially in relation to the bus network, but it has changed the face of Delhi – and if it is one of the few in the world that is profitable, this is because the Metro was given lots of free land to monetize by way of buildings/advertisements; the same will have to be done for all bullet trains.

But imagine the change it will bring – people will be able to live in Ahmedabad or Surat or Vadodra or somewhere along the route and commute to/from Mumbai every day. The increase in convenience, the rise in land prices away from big cities and reduced congestion in big cities is the payback that the bullet train has to be measured against – a lower carbon footprint as more renewables are used to power it is another externality.

As in the case of the Delhi metro, the greater the length of the bullet-train network, the higher the economics of scale. Given how the bulk of value-addition takes place in urban areas, and how India’s urban population is growing, connecting cities well is critical to a country’s growth. More aeroplanes between Ahmedabad and Mumbai, in this instance, are certainly a substitute for the bullet trains to transport people, but that’s not costless as critics of the bullet train assume. Apart from the strategic lift to Indo-Japanese ties, Thursday’s foundation-stone-laying – by prime ministers Modi and Abe – is a big step forward in India’s urban journey.

  1. H
    harsh
    Sep 18, 2017 at 5:06 pm
    In India, we still have main rail corridors which have a single line. Meaning if two trains run from opposite direction, then one has to wait for the other to pass. Goods are always the second priority. In such a situation, we need to look at ways and means to increase the density of our railway tracks rather than spending huge amounts of money on iconic projects. India really needs on all the main lines four tracks two for passenger and two dedicated to freight. You tell these Japanese guys that in India trains getting late by an hour or two is normal, they will faint.
    Reply
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      Patrick Pang
      Sep 14, 2017 at 7:43 am
      There is a cheaper alternative which reduce cost of construction n operation. It's the magplane developed in the US. This tech will leap frog India into the next generation of train.
      Reply
      1. R
        rama
        Sep 14, 2017 at 12:40 am
        If commute of middle class service personnel is the aim Then a bullet train between Bombay Pune is the logical one But this track obviously is for the convenience of the business community from Gujarat to Maharashtra so money will be made in Maharashtra and taxes will be paid in Gujarat and spent in Gujarat
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          Eric Wolfe
          Sep 14, 2017 at 12:21 am
          Bullet trains is an absolute necessity in India as it takes lot of time to reach railway stations.
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            Nilesh
            Sep 14, 2017 at 12:15 am
            Mumbai ahmedabad fare starts from 300 rs.700 rs for volvo sleeper.this bullet train is meant only for the vyaparis to do updown at a dicounted rate.whole aiyashi from taxpayers money.no man is perfect.this is darker side of modiji.he is ready to waste money on industrialist comfort stead he could have speeded up monitoring and laying of new tracks and safe. coaches.log to nahi marte na yaar.but being responsible citizen ee should ask him to stop wasting money .if bullet train is needef find the right route linking industrial cities.
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              Inder
              Sep 13, 2017 at 9:23 pm
              I am sorry i do not want to crticize but your fact knowledge of India's per capita is wrong. Right now India's per capita is around $120.
              Reply
              1. Tushar Kanta
                Sep 14, 2017 at 2:55 am
                : livemint /Politics/EqruCBRa2NLXByxgIJZeNL/Per-capita-income-rises-97-to-Rs103-lakh-in-FY17
                Reply
              2. C
                CharlesWilliamMorganJr
                Sep 13, 2017 at 8:09 pm
                Approximately half of China's bullet train routes are already profitable. It will be the same in India. They gain riders significantly annually for the first five years, and they are filled, and more trains must be added. India should plan to break ground for a new high-speed line quarterly until all cities of over 500,000 population are served by bullet trains. A crucial need is to connect Delhi and Beijing by high-speed rail. This would provide a safe, comfortable, rapid, inexpensive method of transport for tourism, travel, and trade, and employ millions more, raising the living standards for millions. It would quickly become the world's most heavily used rail route.
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                  Ajay Goswami
                  Sep 13, 2017 at 7:38 pm
                  i dont understand how its narendra modi's india either u r a modi hater or u dont know this country belongs to each and everyone who lives here and serves the country.. use less news today or tmrow u need a better way of traveling. y india cannot afford of course we can.. when we never thaught in kolkata metro is there since 1980 in mumbai 2014 y so much delays.. ur news should focus on betterment not for dividing.. and one more thing iam not a bjp supporter orcfan of any political party
                  Reply
                  1. Tushar Kanta
                    Sep 14, 2017 at 2:57 am
                    It is called Narendra Modi's India because the critics are mostly from opposition parties and they oppose each and every move of him. Of course, some of the moves are really bad but not all.
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                    masha
                    Sep 13, 2017 at 3:20 pm
                    now will you pls do a piece on how building a 300ft Chhatrapati Shivaji Maharaj statue for a Rs one lakh crore soft loan from China with virtually nil interest will be very beneficial for Mumbaikars because the volume of sea water that will be displaced and closer to town will make it easier for them to commute in boats? and either we take the loan or we leave it and we can t use it for making tiny Shivaji fig s for every Mumbai household to have? bhai, kucch bhi. And we're not even going near that estimated USD 90b that this country saved when oil prices plummeted really low, a development still on now to an extent compared to earlier. Or even near how much in real terms this nation and its economy lost thanks to one man's bullish political greed.
                    Reply
                    1. Tushar Kanta
                      Sep 14, 2017 at 2:59 am
                      May be you didn't listen to what Congress said after that. They wanted credit for that sea water displacement you are talking about. So, its not one man's greed, its a greed of whole political class..
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                      Vivek
                      Sep 13, 2017 at 2:25 pm
                      When China began planning its high-speed rail network, it already had substantial trade surpluses. Today, it generates nearly a trillion dollars a year in trade surplus. And India? A trillion dollar deficit every ten years. To try to compare India with China is simply ludicrous.
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                        Ismail Mulla
                        Sep 13, 2017 at 12:22 pm
                        Let me correct you financial express... It's not Narendra modi's India... it is India's narendra Modi.. India does not belong to any people and will never... people of India belong to its country..
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                          Mahipati
                          Sep 13, 2017 at 11:40 am
                          What exactly is the purpose of article and what Mr. Jain wants to tell the people?
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                            Maneesh
                            Sep 13, 2017 at 11:12 am
                            Journey time between primary destinations is the most crucial variable dictating traffic. Large scale shift from air travel can be achieved if travel time by bulllet train is within 60 to 90 mins more than end to end journey time by air. Thus, train travel with greater productive time on board, would be preferred by business travellers which is where this should be pitched
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                              Harshadkumar govindji joshi
                              Sep 13, 2017 at 10:27 am
                              Bullet train will bring recession in construction / real estate industry of Mumbai.if your argument is to believe.
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                                Ketan
                                Sep 13, 2017 at 8:51 am
                                I want to say only one thing that is Why Modi's India?? For our India?? Isn't a good ??
                                Reply
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                                  Amit Bajpayee
                                  Sep 13, 2017 at 8:27 am
                                  Indeed it a great step forward,everything can be compared just on the basis of cost.If India really want to be a true super power than it has to embrace latest technology n boost its infra in shortest possible time.
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                                    Alok Kumar Verma
                                    Sep 13, 2017 at 7:59 am
                                    The author seems not to have verified his facts. Only two short stretches of Shanghai- Wuhan-Chengdu line are designed for 300 km/hr. Till 2014 only conventional trains ran on some long sections of this line. China HSR (High Speed Rail) is not like the Bullet Train lines. Most of China's HSR line carry a mix of conventional and high speed trains and the average cost of China's HSR is nearly half of other HSR lines. So China HSR is clearly not comparable to Ahmedabad Mumbai proposed line.
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                                      Harry
                                      Sep 12, 2017 at 11:33 pm
                                      Certainly a waste looking at the congested and tough life that over 2 Cr Mumbaikar live everyday. It's good to aspire for moon, but not at the cost of keeping the inhabitants on your own planet in dark! A mumbaikar will understand this better. From borivali to Dadar or Goregaon West to thane, will such 2 hrs everyday, and you want to reduce intercity commute time? Why should I pay the burden of this Govt's extra ordinary dream, while it can't give me a pothole free drive today, and where we waste 2 hrs a day commuting merely 15 kms. Isn't bizarre knowing that over 7 million commuters a day in Mumbai helplessly spend 10-15 million hours a day on road or in train? What a colossal waste? A pothole, a ditch on THE Western Express Highway at the beginning of southbound Airport flyover, or opposite hub mall, can't be seen by these dreamers yet they want to infuse almost ₹ 1,00,000,000,000,00 (yes 1 lakh Cr) on 1 bullet train? Mind it? Appreciate the vision, but by ignoring the big miss!!!
                                      Reply
                                      1. M
                                        masha
                                        Sep 13, 2017 at 3:23 pm
                                        you tell him, bhai. he s busy doing a PR piece for Modi gvt to waste huge sums of money in the name of development while Mumbai is drowning in seasonal monsoons.
                                        Reply
                                        1. Tushar Kanta
                                          Sep 14, 2017 at 3:03 am
                                          You are doing better than us Bangaloreans. We spend 1.5 hours for 6-7 kms. We have a congress government here. Bus fares are sky high and its difficult to get a bus after 9:30 pm..
                                          Reply
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                                          Avishek
                                          Sep 12, 2017 at 10:43 pm
                                          India has nothing to do with bullettrain. First education, medical, to be improved. This government is worthless
                                          Reply
                                          1. S
                                            Swami Durgananda
                                            Sep 12, 2017 at 10:33 pm
                                            Wonderful article, Mr. Sunil Jain. You have illumined the case very well. Most people are commonplace and tilt towards populist arguments. India needs an intellectual awakening that will jerk the country out of dull thinking.
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                                              Dhaval
                                              Sep 12, 2017 at 10:00 pm
                                              First of all I shoul like to tell auther India is not a peoperty of any one it does not own by feku or pappu from nehru dynest it is a mother land of all Indians living with the spirit of patriotism so kindly stay away from worlds like modi's india or any else's. Bullet train is always welcomed it it is for interest of common people and development of our country but at present it seems rulling party as well as opposition doing politics on the name of bullet train they should think above their parties interest and what is benificial for people or country should come first. Take it granted now nobodies polotical agenda will tolerated by people for long. Jai hind.
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