A Journal on Metro & Railway

The Japanese International Cooperation Agency (JICA), the aides say, has estimated the financial rate of return at 4.4 percent a year. This is less than the yield on government bonds. But the economic rate of return – or the impact on the economy – is estimated at 13 percent annually.

Fares alone will not be enough. Japanese bullet trains are cross-subsidised by revenue from property development. India’s bullet train corporation should be able to skim the increased land value it will create along the route through industrial enclaves and townships.

The project will take two-and-a-half years to plan and eight years to complete.

Though Japanese financial terms seem fetching, they may not actually be so. Former railway official Ved Mani Tiwari who, until August, was director of Kochi Metro Rail, found the dollar to be the most stable over a 40-year period, with annualised volatility of 4.5 percent. The currencies constituting the Euro yo-yoed by 6.5 percent while the yen swung the most at 9.5 percent annually.

If the Japanese loan for the bullet train is ‘tied’ and India can only buy Japanese equipment it might pay more than it should. Japanese electric engines for the Japanese-financed western freight corridor cost more than Rs 50 crore each. Alstom India has undertaken to supply higher capacity (12,000 hp) electrical engines with maintenance thrown in from its Madhepura plant for Rs 24 crore each.

Making Travel Efficient

As India’s economy grows and people’s income goes up, it will need an efficient way of moving large number of people quickly over long distances. It cannot depend on air travel alone for reasons of energy efficiency and climate change. Trains use one-fifth the energy of airplanes and the carbon emission per passenger is much lower.

The Railways have already conducted studies to examine the viability of six high-speed rail routes. These are:

• Delhi–Chandigarh–Amritsar (450 km)
• Pune–Mumbai–Ahmedabad (650 km)
• Hyderabad–Dornakal–Vijaywada–Chennai (664 km)
• Chennai–Bangalore–Coimbatore–Ernakulam (649 km)
• Howrah–Haldia (135 km) and
• Delhi–Agra–Lucknow–Varanasi–Patna (991 km).

But if funds were finite and India had to choose between rail services that would give the biggest bang for money, it would opt for elevated 200 kmph semi-high speed trains connecting the metros with satellite cities that would make quick getaways possible.

• Japanese International Cooperation Agency estimates financial rate of return at 4.4 percent a year
• Economic rate of return – or the impact on the economy – estimated at 13 percent annually
• If Japanese loan is ‘tied’ and Japanese equipment purchased, India might end up paying more
• India needs more freight-only rail corridors and upgrading of existing routes to semi-high speed
• Moving trains to higher speed, comfort and safety would have a greater impact

If one could cover the distance between Delhi and say Agra or Alwar in about an hour, it would make sense to live there and work in the capital. Such services would decongest the metros, bring down the cost of living, improve the quality of life and spread economic development around.

They would also boost domestic manufacturing of railway equipment, just as intra-city metro rails have done.

There would be a lot more demand for engines, coaches and communication and signalling equipment, which would spur the ‘Make in India’ campaign.

The Japanese had themselves recommended semi-high speed for the Delhi–Mumbai route when the western freight corridor became operational. A JICA study expected 60 percent of freight trains on the Delhi-Godhra route, and 90 percent on the Godhra–Mumbai leg to shift across.

The capacity released would make semi-high speeds passenger trains of up to 200 kmph possible on the existing track (with fenced or elevated tracks, heavier rails, curves designed for tilting and collision preventing signalling systems).