India’s ambitious Rs 1.08 lakh crore Mumbai-Ahmedabad bullet train project was launched in 2017. Deadline for commissioning of the project has been preponed to August 2022 from earlier set deadline of 2023. Work on the ground started in December 2017 with initiation of the process of land acquisition. The project would require over 1,400 hectares of land with 353 hectares in Maharashtra and the rest in Gujarat.
The deadline for completion of land acquisition has been set as December 2018. Though LIDAR (aerial survey) was completed early last year and physical survey started in December 2017, physical handover of land has not advanced much with only 3 months left for the targeted deadline. The situation may become more complex with the two states having different compensation laws and protests building up against the bullet train projects.
India has had bad share of experiences with similar ambitious projects. The 3,342-km Dedicated Freight Corridor (DFC) is already facing challenges of delays and cost overruns. The targeted completion of the DFC project was 2016-17, which shifted to the year-end of 2017-18 and now has finally been set at April 2020. As per a CAG report estimate, the delay has resulted in cost escalation from Rs. 281.81 billion in 2008 to Rs. 814.59 billion which implies almost 2.9 times increase from original cost estimates. Key reasons for delay in commissioning of the project include land acquisition problems, decision on technology selection and administrative hurdles.
Since technology is already finalized in the MOA, it is not expected to be a major hurdle for development of the Mumbai-Ahmedabad bullet train project. However, land acquisition particularly due to almost straight alignment could be a cause of concern for the National High Speed Rail Corporation Limited (NHSRCL), which is a joint venture of Government of India and participating state governments for implementation of the project.
NHSRCL should oversee that the process is being conducted in a fair and transparent manner on the ground along with proper awareness campaigns to minimize any protests and should endeavour to fast track disputes arising out of land disputes. This would enable them not only in cost controlling but also timely execution of the project. Further, if need for any major technological change arises during execution of the project, efforts should be made to sort it out in an expeditious manner.
By Abhaya Agarwal and Azizul Quadir
(Agarwal is Partner Infrastructure & PPP and Quadir is Associate Vice President – Project Finance and Infrastructure Advisory at EY India. Views expressed are personal)