Time to bite the bullet | Business Standard
Time to bite the bullet
While the enormous sum required to fund a high-speed rail transport system is a deterrent, India can learn from examples abroad
The dream of a 'diamond quadrilateral' promised by the Bharatiya Janata Party in its election manifesto to connect leading cities of India through a high-speed rail network sounds like a dream come true, except for the fact that it is not a new idea, but one that has proved elusive for many years.
It was 43 years ago that the then Railway Board chairman, B C Ganguly, envisioned a train service running at over 170 kmph. He also conceived it to be incrementally increased by 5 kmph every year. This was just seven years after the first ever high-speed train was started in Japan in 1964.
Given that Indian Railways adds just an average 220 km each year to the rail network (compared to the over 1,000 km in China), it would be cynical to think of superfast trains running at over 200 kmph and up to 350 kmph. With mixed traffic using the same tracks, the average commercial speed for long distance trains currently is 70-80 kmph, while freight runs at an abysmal 25 kmph. Also consider the fact that a simpler task like converting hygiene facilities in all passenger trains to bio-toilets will take the Railways more than five years. Speedier trains have another hurdle to contend with: in the past three years, Indian Railways has registered over 700 deaths at unmanned level crossings and an alarming increase in incidents of fire on trains. A high-level safety committee has argued that any further addition of new trains to the existing network will be detrimental to the safety of passengers.
Yet, as one senior Railways official puts it, "The question is not whether we should have high-speed trains, but rather what we are losing each year in their absence." So, here is some good news. In the coming 2-3 months, the speed on the Delhi-Agra route will be increased to 150-160 kmph. Two other key routes - Delhi-Chandigarh and Delhi-Kanpur - have also been identified for this experiment, a process similarly adopted by countries like France and Germany before they took to high-speed rail transport, according to J P Batra, former chairman of the Railway Board.
But cost, feasibility and integrated planning continue to hobble the aspirations of a bullet train system in India, and the success of such an enterprise will largely depend on the willingness of the incoming government to pump in more funds or look for alternative funding avenues for the gigantic project.
Funding has been a key roadblock. The estimated cost of a route identified and currently under feasibility studies supported by Japan, the Mumbai-Ahmedabad line, is about Rs 100 crore per kilometre, with a total project cost of about Rs 37,000 crore. Add to this the price of land under the new Land Acquisition Act, and the cost goes up tremendously. The cost of this line alone would be close to the Railways annual revenue. A high-speed corridor requires new tracks to be laid out, wide arcs for turning, special metal for the tracks and signal-free corridors. The eventual saving in terms of time via high-speed trains could be mere hours.
Given the humongous sums involved, the global lesson from countries like China, Japan, France and Germany is that it is only through state or government funding that such infrastructure can be created. "Public private partnerships cannot be the way forward for high-speed rail," says Vishwas Udgirkar, senior director, Deloitte India. "We will have to look at more bilateral engagements - like soft loans from Japan, World Bank or some other avenue though the lenders can be part of the operations."
Speaking recently to Business Standard, Yoshiyuki Kasai, chairman of Central Japan Railway Company, said, "These are not the kind of projects in which private players would be much interested." He explained, "The system has to be operationally viable and consumers should be ready to pay for the services and it cannot run on subsidies." But he also disclosed that the construction of high-speed rail infrastructure and the Shinkansen bullet trains in Japan, which was done with the aid of a government loan, had proved profitable, enabling the repayment of all loans.
Chinese Prime Minister Li Keqiang was recently quoted by New York Times as saying that the country would invest $100 billion a year in its train system, especially on the high-speed network. This is after China already has the largest high-speed rail system in the world. Funding for this has come through the government, loans from state-owned banks and other financial institutions. The same model of funding has been followed by other countries with high-speed trains, like Japan and Germany, who started operations earlier than China.
Research on high-speed rail transport shows that a volume of 40,000 passengers per day is needed to justify the project costs. India is at an advantage here with a high density of population and low labour costs. And building high-speed train infrastructure need not necessarily be a loss-making enterprise. Japan registered profits three years after opening the Shinkansen network, while France recovered the investment costs within 12 years, according to a study done by the transport studies unit of the Oxford Centre for the Environment.
In line with the vision laid out in the 11th and 12th Five-Year Plans, the High Speed Rail Corporation of India was set up in 2013 as a subsidiary of the Rail Vikas Nigam Limited. It is headed by Satish Chandra Agnihotri. Railway Board Chairman Arunendra Kumar is also believed to be pushing for speed enhancement on the existing lines.
The current experiment to enhance the speed on existing tracks should not burden the Railways too much. "To increase the speed up to 160 kmph would not require any new procurement; the existing tracks can be used," says Agnihotri. But he agrees that anything beyond 200 kmph would require dedicated tracks, modern signalling and new coaches. "Above all, we need to have the support and cooperation of state and Central governments," he says. Of the 64,000 km of the extant Indian Railways network, 15-20 per cent is feasible for running trains up to 170 kmph.
A big argument often proferred is that a bullet train is not feasible for low-income countries like India. Indeed, India lags in per capita gross domestic product levels of the countries in the year they started their high-speed rail transport, France in 1981, Germany in 1991 and China in 2007. But Japan's system was developed under wider economic considerations and regional integration. For the first few years, the Japan Railways Group even permitted cross subsidies between the profitable and unprofitable routes, according to a study done by Institute of Transport Studies at the University of Leeds.
Following the global prudence of keeping fares affordable in the initial years, Indian Railways also plans to focus on reasonable fares, indigenisation of technology through technology transfer and the eventual local production of coaches and engines, and economies of scale. New industries for coaches and engines need to be set up and these will significantly bring the down the project cost, feels Agnihotri.
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