Japan has offered to finance India’s first bullet train, estimated to cost nearly Rs. 1 lakh crore ($15 billion), at an interest rate of less than 1 per cent, officials said, stealing a march on China, which is bidding for other projects on the world’s fourth-largest network.
Tokyo was picked to assess the feasibility of building the 505-kilometre corridor linking Mumbai with Ahmedabad, the commercial capital of Prime Minister Narendra Modi’s home state, and concluded it would be technically and financially viable.
The project to build and supply the route will be put out to tender, but offering finance makes Japan the clear frontrunner.
Last month China won the contract to assess the feasibility of a high-speed train between Delhi and Mumbai, a 1,200-km route estimated to cost twice as much. No loan has yet been offered.
Japan’s decision to give virtually free finance for PM Modi’s pet programme is part of its broader push back against China’s involvement in infrastructure development in South Asia over the past several years.
“There are several (players) offering the high-speed technology. But technology and funding together, we only have one offer. That is the Japanese,” said A. K. Mital, the chairman of the Indian Railway Board, which manages the network.
The two projects are part of a ‘Diamond Qaudrilateral’ of high speed trains over 10,000 km of track that India wants to set up connecting Delhi, Mumbai, Chennai and Kolkata.
Japan has offered to meet 80 per cent of the Mumbai-Ahmedabad project cost, on condition that India buys 30 per cent of equipment including the coaches and locomotives from Japanese firms, officials said.