Railways unlikely to seek extra loan from JICA to meet higher cost of Bullet train project

NEW DELHI: The railways is looking at bearing the nearly Rs 90,000 crore additional (83% escalation) cost for the Ahmedabad-Mumbai Bullet train project and won’t seek further loan from Japan International Cooperation Agency (JICA). The project cost has increased from Rs 1.1 lakh crore to Rs 1.98 lakh crore because of delays and other reasons.

The railway ministry is likely to come up with the revised cost estimate for the 508-km high-speed rail corridor and will seek Cabinet’s approval for funding to ensure the project’s completion. People aware of the plan said that the ministry would seek additional funding from the finance ministry.

JICA is providing approximately 81% of the original estimated cost through an Official Development Assistance (ODA) loan at a highly concessional interest rate of 0.1% per annum. The repayment period is 50 years, with a 15-year grace period.

Meanwhile, at a webinar on the recently announced seven Bullet Train corridors which will cover over 4,000 km and require an estimated investment of Rs 16 lakh crore, Railway Board said that it’s looking at different funding options, including financing via multilateral support, Special Purpose Vehicles (SPVs) and Centre-state partnership. Railway Board chairman Satish Kumar said that they are looking at intensive development along the new corridors, known as Transit Oriented Development (TOD), for viability, which experts said can be used to raise non-fare revenue for the projects.

Speaking at the post-budget webinar, BEML CMD Shantanu Roy said that India needs to be self-reliant in making Bullet trains and a beginning has been made by the PSU to manufacture the first two. He added that in the future, the speed of these indigenous trains can be increased from 280 kmph to 350 kmph.

Railway officials and experts said that standardisation of the entire system from construction to signalling and train manufacturing is being looked at for all future Bullet Train projects so that there is economy of scale.

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