For high-speed rail infrastructure, Beijing plays its ‘low-cost’ card

Dec 01 2012, 11:43 IST
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SummaryIt’s not just the Japanese and the French—the Chinese, too, have evinced interest in India’s plan to develop high-speed rail infrastructure.

It’s not just the Japanese and the French—the Chinese, too, have evinced interest in India’s plan to develop high-speed rail infrastructure. It’s a welcome move despite the political sensitivities involved as Beijing promises to lower costs by a third.

A Chinese team, led by a senior rail ministry official, discussed the possibility of Chinese participation in the proposed 543-km Mumbai-Ahmadabad high-speed rail network. While these are just preliminary talks, the idea is to agree on how Chinese funds and technology will be used for the project and define the revenue models for this PPP venture, whose cost is now estimated at over R60,000 crore. Railway ministry officials said China has evinced interest in undertaking its own feasibility study of the project. The PPP model to be adopted could be design, build, operate and transfer, if Chinese firms pick up equity in the project. Or, China could just provide soft loans and part with technology on the basis of a mutually agreed compensation formula.

“There's nothing wrong If China has also shown interest in our railway projects. India will have not just one high speed corridor, but many,” deputy chairman of Planning Commission Montek Singh Ahluwalia had said earlier this week during the second India-China Strategic Economic Dialogue.

India is looking to explore options other than Japan, which is involved in several railway projects, both on technology transfer and funding.

The Japanese government, through the Japan International Cooperation Agency (JICA) is already funding several mega railway projects, including a part of R80,000-crore dedicated freight corridor project. Even the Mumbai-Ahmadabad project is eyed by Japanese agencies and reports are being prepared.

Interestingly, the feasibility study for introduction of high-speed trains in India, which was presented in the Rail Board on November 1,was sponsored by Japan's ministry of economy, trade and industry.

The cost of building such a network is around R200 crore per km if Japanese technology is used. This would be much cheaper with Chinese technology. But China is a new entrant into the high-speed train sector as the service was introduced in 2007.

Questions have been raised over the safety of Chinese high-speed rail and the technology they use after an accident which killed more than 35 people in 2011. China has also not tested its rail technology outside the country.

Government sources said that China is also being involved in other projects of the railways. Indian railways took a team of visiting

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