Mumbai - Ahmedabad high-speed line costs rise by 83%

The Indian government is likely to bridge the funding gap rather than rely on another loan from Japan.

Japan has gifted two second-hand series E3 Shinkansen trains to India for test running.

Photo Credit: CC BY-SA 3.0/Mutimaro

THE costs of the Mumbai - Ahmedabad high-speed line have reportedly risen by 83%, with an additional Rs 900bn ($US 9.78bn) now required to complete the project. The increase is understood to be largely the result of protracted negotiations relating to land acquisition which resulted in land costs rising substantially by the time agreements were reached.

Japan is providing approximately 81% of the original estimated cost of Rs 1.08 trillion through an Official Development Assistance (ODA) loan. Reports indicate that total project costs have escalated to Rs 1.98 trillion.

However, against the backdrop of India’s disagreements over rolling stock and signalling contracts, the new government in Tokyo led by Sanae Takaichi is unlikely to extend a further loan to support the already delayed project. This means any additional funds would be drawn from the Consolidated Fund of India.

“The National High Speed Rail Corporation Limited (NHSRCL) has its own financing structure involving the government of India and the participating state governments, and it would be incorrect to say that the entire burden of the increased costs is being placed on Indian Railways,” a spokesman for the project delivery agency says.

Sources add that a note on the revised costs will shortly be submitted to the Union Cabinet for approval.

Revision

After spending 53% of the original estimated cost, the project appears to be undergoing a mid-course revision. The government has expressed reluctance to procure the 320km/h E10 Shinkansen trains offered by Japan at a cost of Rs 200bn. Instead, the government has contracted state-owned Bharat Earth Movers Limited (BEML) to manufacture two prototype trains designed to run at a maximum speed of 280km/h. Japan has also offered to provide two used E5 Shinkansen trains to enable India to conduct trials on the 50km Surat - Bilimora section. These are expected to arrive later this year.

The signalling contract was meanwhile awarded last June to a consortium of DRA and Siemens, which will equip the line with ETCS Level 2, rather than the coaxial leaky cable system offered by Japan.

The NHSRCL has also faced difficulties acquiring the 13m tunnel boring machines (TBMs) required to construct an underwater tunnel near Thane Creek in Maharashtra. The TBMs, built by German company Herrenknecht at its facility in China, initially failed to reach India after the vessels transporting them were intercepted in the South China Sea by Chinese customs authorities. Following intervention by India’s foreign minister S Jaishankar, the Chinese government eventually allowed the shipment to proceed. However, sources indicate that several critical components are missing, leaving the TBMs idle at Mumbai port.