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NEW DELHI: India and Japan are set to firm up an agreement on highspeed train services, widely referred to as 'Bullet Trains', during Japanese Prime Minister Shinzo Abe's visit next week.
Senior government sources told ET that Abe's Special Adviser Hiroto Izumi will be in Delhi this week for high-level talks to finalise the terms of the agreement on high-speed trains, known as Shinkansen in Japan. He will be negotiating the details with senior officials in the Prime Minister's Office (PMO) and the railway ministry. The first train is planned between Mumbai and Ahmedabad.
The project will cut travelling time between Mumbai and Ahmedabad from seven to two hours.
Further, Japan is likely to agree to finance the Rs 90,000 crore-plus railway project through a soft loan at 0.5% interest with a repayment tenure of 50 years, according to the people cited. Usually, Japan offers this sort of project financing at 1.5% interest and a tenure not exceeding 25 years.
"The rate of interest and repayment time proposed by Japan are extremely attractive for India.
This has been possible only because of the push by the PMs of both the countries. We are hopeful this will also prompt other countries to go for lower interest rates for our infrastructure projects," said a PMO official.
"These are very favourable terms, and also show the extent to which Japan has gone to relax these conditions, especially for India. It will be a very significant project," a senior official added. Abe is expected to arrive on December 11 while the finalisation of the Bullet Train agreement is likely to happen the next day. Abe will also visit Varanasi.
Abe and Modi had agreed to twin the city with Kyoto, a city with deep cultural and historic roots like Varanasi, during the Indian PM's visit to Japan last year. During the visit, both leaders agreed to collaborate on India's Bullet Train project, which was also a pre-poll promise by Modi.
According to officials, the Japanese proposal says its role would include construction, fixing the route, providing technology and assisting in procurement of equipment, besides providing consultancy and executing the project.
Feasibility study by JICA
A team from Japan International Cooperation Agency (JICA) has studied the feasibility of building the 505-kilometre corridor linking Mumbai with Ahmedabad and has concluded that it would be technically and financially viable.
The report, which was submitted to the Indian government in July this year, estimated that the project — that will see trains running at over 300 km per hour — will cost Rs 98,805 crore. Officials said the report has been analysed by PMO and railway ministry officials.
Given the scale and novelty of the project, the Japanese government is keen to discuss every little detail to avoid any misinterpretation in future, sources said. Besides firming up costs, there are details on technology transfer, skilled labour, equipment manufacturing and maintenance that have to finalised. The aim is to ensure the project is operational by 2024.
Last year, after Modi's visit to Japan, the department of industrial policy & promotion (DIPP) set up 'Japan Plus' — a special team comprising officials from both countries to facilitate and fast-track investment proposals from Japan.
Delhi & Tokyo may ink pact for India’s first Bullet Train during Japanese PM Shinzo Abe’s visit - The Economic Times
Senior government sources told ET that Abe's Special Adviser Hiroto Izumi will be in Delhi this week for high-level talks to finalise the terms of the agreement on high-speed trains, known as Shinkansen in Japan. He will be negotiating the details with senior officials in the Prime Minister's Office (PMO) and the railway ministry. The first train is planned between Mumbai and Ahmedabad.
The project will cut travelling time between Mumbai and Ahmedabad from seven to two hours.
Further, Japan is likely to agree to finance the Rs 90,000 crore-plus railway project through a soft loan at 0.5% interest with a repayment tenure of 50 years, according to the people cited. Usually, Japan offers this sort of project financing at 1.5% interest and a tenure not exceeding 25 years.
"The rate of interest and repayment time proposed by Japan are extremely attractive for India.
This has been possible only because of the push by the PMs of both the countries. We are hopeful this will also prompt other countries to go for lower interest rates for our infrastructure projects," said a PMO official.
"These are very favourable terms, and also show the extent to which Japan has gone to relax these conditions, especially for India. It will be a very significant project," a senior official added. Abe is expected to arrive on December 11 while the finalisation of the Bullet Train agreement is likely to happen the next day. Abe will also visit Varanasi.
Abe and Modi had agreed to twin the city with Kyoto, a city with deep cultural and historic roots like Varanasi, during the Indian PM's visit to Japan last year. During the visit, both leaders agreed to collaborate on India's Bullet Train project, which was also a pre-poll promise by Modi.
According to officials, the Japanese proposal says its role would include construction, fixing the route, providing technology and assisting in procurement of equipment, besides providing consultancy and executing the project.
Feasibility study by JICA
A team from Japan International Cooperation Agency (JICA) has studied the feasibility of building the 505-kilometre corridor linking Mumbai with Ahmedabad and has concluded that it would be technically and financially viable.
The report, which was submitted to the Indian government in July this year, estimated that the project — that will see trains running at over 300 km per hour — will cost Rs 98,805 crore. Officials said the report has been analysed by PMO and railway ministry officials.
Given the scale and novelty of the project, the Japanese government is keen to discuss every little detail to avoid any misinterpretation in future, sources said. Besides firming up costs, there are details on technology transfer, skilled labour, equipment manufacturing and maintenance that have to finalised. The aim is to ensure the project is operational by 2024.
Last year, after Modi's visit to Japan, the department of industrial policy & promotion (DIPP) set up 'Japan Plus' — a special team comprising officials from both countries to facilitate and fast-track investment proposals from Japan.
Delhi & Tokyo may ink pact for India’s first Bullet Train during Japanese PM Shinzo Abe’s visit - The Economic Times
