Does India need a bullet train? – D. Raghunandan

Narendra Modi & Shinzo Abe

D. RaghunandanThe bullet train is a wasteful project which only serves to deliver an illusory feel-good perception among the wealthy. – D. Raghunandan

The Mumbai-Ahmedabad bullet train is a vanity project which has little or no justification on the grounds of economic viability or public service. Even the vanity angle—looking to position India among the ranks of developed countries—is a huge overreach. Only a handful of high-income countries with specific demographics have high-speed rail (HSR), while many have failed in their efforts, others have abandoned it after studying it. The main problem is viability, given the huge costs involved.

Failed and struggling projects

Japan’s pioneering Shinkansen, which connects Tokyo to Osaka, passes through the biggest industrial and commercial centres, caters to almost 50% of Japan’s population, and carries more than 150 million passengers annually. South Korea’s Seoul-Busan HSR caters to almost 70% of the population, yet struggles with viability. France’s fabled Paris-Lyon HSR service has had to periodically receive substantial subsidies. Taiwan’s $14 billion HSR service between Taipei and Tainan virtually became bankrupt after losses of over $1 billion. It realised only 50% of the projected ridership and required government bailout. Argentina gave up on HSR ambitions on cost grounds, deciding instead to upgrade its entire railway system to medium-speed infrastructure, an option India should seriously consider. Even the U.S. is tentatively initiating a San Francisco-Los Angeles corridor, and is still unsure about the densely populated industrial-commercial Philadelphia-Boston-New York-Washington DC corridor. Turkey’s Ankara-Istanbul HSR line is the only example from a middle-income country, and the jury is still out on its viability.

China is, of course, an exception, as it is in most things. While reliable data are hard to come by about its 20,000 km of HSR, it is known that fares have been revised downwards many times to match passenger pockets, and that the railways has run up an internal debt of over $300 billion. Is India ready for such an eventuality?

For the rich

The Mumbai-Ahmedabad HSR costs around ₹1 lakh crore. Estimates in the project report by the Indian Institute of Management, Ahmedabad show that at least 1 lakh passengers at fares of ₹4,000-₹5,000 would be required daily for the project to break even. The tariff is too high—air fares between the two cities are around ₹2,500. Subsidies appear inevitable. Subsidies for agriculture, education and healthcare are taboo, but subsidies for the rich seem unproblematic.

Should India spend over ₹1 lakh crore for a 508-km HSR used by well-heeled passengers when over 90% of rail passengers in India travel by sleeper class or lower class for thousands of kilometres? Project supporters argue that one should not view these as either-or propositions. Unfortunately, one is only seeing expensive projects for the upper classes so far, such as the misleadingly named ‘smart cities’. When will the Railways see investment for new tracks and upgrading services for 90% of the travelling public?

A myth being propagated is that this project will have knock-on effects on technology absorption by India through future HSR projects. Can anyone imagine India spending 15 times the present project cost for the pipe dream of 6,000 km of a “golden quadrilateral” of even less viable HSR tracks, as promised in the BJP’s 2014 election manifesto? Another myth is that the Japanese funding at 0.1% interest with a 15-year moratorium is “almost free.” Many business analysts have pointed out that the repayment amount will amount to ₹1.5 lakh crore over 20 years allowing for exchange rates and comparative inflation.

The bullet train is a wasteful project which only serves to deliver an illusory feel-good perception among the wealthy.The Hindu, 6 October 2017

» D. Raghunandan is Director, Centre for Technology and Development, New Delhi.

Bullet Train Route

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One Response

  1. As Modi plans a bullet train, RTI query reveals 40% seats on Mumbai-Ahmedabad trains go vacant – Bijin Jose – IANS – Oct 31, 2017

    As the Narendra Modi government proceeds with the grandiose plans for a Bullet Train between Mumbai and Ahmedabad, a RTI query has revealed that over 40 percent of seats on all the trains on this sector go vacant causing huge losses to Western Railway.

    According to RTI replies received by Mumbai activist Anil Galgali, only in the past one quarter, the Western Railway’s staggering losses on this secor is nearly Rs 30 crore, or around Rs. 10 crore per month.

    “The Indian government is over-enthusiastic and plans to spend more than Rs 1 lakh crore on the Bullet Train project, but it has not done its homework properly,” Galgali said, adding it raises serious question marks on the viability of the Bullet Train project, whenever it comes up.

    The Indian Railways have also admitted that they have no plans to introduce any new trains on this sector which is already in the red.

    Replying to Galgali’s query on seats occupancy on all the trains between the two cities, the WR revealed that in the past three months, 40 percent all seats went vacant on the Mumbai-Ahmedabad sector and 44 percent empty on the Ahmedabad-Mumbai route.

    WR’s Chief Commercial Manager Manjeet Singh said that between July 1-September 30, there are 32 mail/express serving this sector with a total seating capacity of 735,630 seats on the Mumbai-Ahmedabad sector.

    Of these, only 441,795 seats were booked during that period generating a revenue of Rs 30,16,24,623 against the total estimated expected income of Rs 44,29,08,220 – incurring a huge loss of Rs 14,12,83,597 in the past quarter.

    Similarly, on the Ahmedabad-Mumbai route served by a total of 31 mail/express trains with a seating capacity of 706,446, only 398,002 seats were booked, resulting in a revenue of Rs 26,74,56,982 against the estimated expected income of Rs 42,53,11,471, spelling a massive loss of Rs 15,78,54,489.

    The WR provided the data of all the major trains plying on the Mumbai-Ahmedabad-Mumbai route like the Durantos, Shatabdi Expresses, Lokshakti Express, Gujarat Mail, Bhavnagar Express, Saurashtra Express, Vivek-Bhuj Express and others.


    Faced with the vacancies on existing trains, the WR Divisional Engineer, Ahmedabad informed that there is no fresh proposal to introduce any new trains on this sector.

    In fact, Galgali said that the most popular train, 12009 Shatabdi Express with a capacity of 72,696 seats sold only 36,117 during the July-September period on the Mumbai-Ahmedabad route and in the return direction of the total 67,392 seats, only 22,982 were sold.

    This train, which once always ran packed in all seasons both ways has now proved to be a loss-maker, and the executive chair car with 7,505 seats was practically deserted with just 1,469 seats booked, plummeting revenues from the estimated Rs 1,45,49,714 to a paltry Rs 26,41,083 during the last quarter.

    The position in all other trains was similar and though there is a higher demand for sleeper class compared to seats, the WR has not done enough to augment its capacity.

    Galgali pointed out that given this current alarming scenario, coupled with growing preference for flights and improved road travel, the Central and Gujarat governments must review the expensive option of the Bullet Train before it becomes a white elephant for the Indian taxpayers.

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