We’re not Japan. Such transport extravaganza will become a burden on this poor country’s ailing economy
The current debate around the Mumbai-Ahmedabad bullet train project tries to address three important questions: will the project be economically unviable even in the remote future; will the deal lead to transfer of technology (between Japan and India); and will it be useful for a larger mass of people? The consensus seems to be that bullet trains, ideally, help bolster economies and lift GDP by a few notches by enabling speedy transport of goods and services to locations otherwise unapproachable or not easily accessible, hastening economic activity and generating employment. Railway minister Piyush Goyal thinks the project will immediately give jobs to some 20,000 people during its construction phase. Once the project is finished, some 4,000 people will get permanent jobs. These workers will be running and maintaining the Mumbai-Ahmedabad bullet train corridor.
Now that’s great. But is that really great for a project that costs more than one lakh crore rupees? In case you haven’t read already, the Ahmedabad-Mumbai High Speed Rail Project is estimated to cost Rs 1,10,000 crore. That’s as much as the total money we parked in the budget for the whole of Indian Railways this year. Now, what’s the distance this mammoth project covers? Well, just about 500 km. So, the money we burn is about Rs 220 crore a kilometre. Fine, futuristic projects guzzle money and time. How much did the Delhi metro, which crisscrosses national capital city Delhi, cost? About Rs 80,000 core. The Delhi metro covers about 210 km in the region, having some 160 stations. Last year it ferried more than a billion people. Every day it transports around 2.7 million people. So, ideally, the Ahmedabad-Mumbai bullet train should ferry a lot more, given that it connects two big cities in two different states. As of now, there is no study available in the public domain to estimate the number of people or goods the train could possibly transport.
But that’s in the future and hence one cannot predict. We can only hope that our Prime Minister and his team would have done the maths. Because at a time when the overall economy is not doing well and GDP growth is set to take a plunge further, it is only wise to have a rethink about such projects, especially given the fact that the country runs some 10,000 trains every day, helping about 25 million people to go from Place A to Place B. Our rail network is also huge. It runs into 66,687 km long. Not even half of this works on electricity. Our trains and tracks immediately need a massive upgrade mission. So is it wise to dedicate so much money, that too borrowed, for a single project whose benefits are only in the realm of guesswork as things stand now? We don’t know.
What we know is Shinzo Abe is giving us a loan (a soft one) worth Rs 88,000 crore at 0.1 per cent interest. And one can blindly say it’s a big deal for Japan given that the loan comes at a time when Japan’s economy is struggling with the effects of its almost two-decades of deflation. Bank of Japan was fiddling with negative interest rates in 2016 to bolster prices of goods that remained stalled for years. Without doubt, the Rs 80,000 crore loan to India (even with the nominal interest) will help Japan’s economy as India will buy its products and use its skilled labour and expertise. In sum, the money will travel its way back to Japan, with rich dividends.
Now, what’s the dividend for our commuters? Bullet trains don’t carry freight, which is the money-spinner for Indian Railways. The Ahmedabad-Mumbai bullet train will hence move only people. And who are going to use this on a regular basis? Mostly the rich and affluent as bullet trains are known to be expensive rides. A Japanese scientist, Koichi Tanaka, who won Nobel prize in 2002 had famously quipped that the prize money would make him rich enough to buy a ride at Japan’s Shinkansen bullet train. As of now a ticket can cost up to $130 in Japan, which means around Rs 8,500 for 500 km. You can fly for less. Again, there are also doubts around the kind of technology Japan offers. The country introduced Shinkansen bullet train between Tokyo and Osaka in 1964. Its top speed then was 210 km/hr, against 350 km/hr now. Some 10 other countries also joined the bullet train club ever since. China is the biggest player here. It has some 90 tracks covering about 27,00 km (17 tracks, 3,041 km in Japan). France, Germany, Italy, Spain, South Korea and Turkey also have similar transport systems. But interestingly, not any of them use the Shinkansen. So, are we buying a not-so-great technology for a whopping price tag? Only time will tell us.