Bullet train fares to be cheaper than airfares? Really?

Bullet train's fare is expected to be around Rs 3,300, nearly twice than a one-way flight ticket to Ahmedabad, say experts

Railway Minister Suresh Prabhu, on Wednesday, said the Mumbai-Ahmedabad high speed rail corridor would be up and running in six years and its fare will be less than airfare. The minister, during question hour in Lok Sabha said that the project would be cost-effective.

But several experts say that it is too early to take the government’s claim of Mumbai-Ahmedabad bullet train fares being cheaper than airfares at face value. According to initial estimates, Bullet train’s fare is expected to be around Rs 3,300, nearly twice than a one-way flight ticket to Ahmedabad.

However, an industry expert is of the view that airfares would increase in the next six years at the time of high-speed train becoming operational. 

Also even though the travel time between the two cities will be two hours by the high-speed train, the time spent at check-in counters, as in the case of airports, would be saved, he said.

Location of the station would be in the central part of the city as compared with airports that are usually on the outskirts.

At a maximum speed of 350 km per hour (kmph), the bullet train is likely to cover 508 km between Mumbai and Ahmedabad in about two hours. Currently, Duronto Express takes about seven hours to cover the same distance between the two financial centres.

The number of trips the bullet train makes during the day will decide the real economies of scale for the project. Bullet train would also be seen as a symbol of a major infrastructure thrust by Prime Minister Narendra Modi-led government. The project has been sanctioned with technical and financial assistance from the government of Japan and the joint feasibility study of the project has been done by Japanese International Agency. 

The estimated cost of the 508-km long project is about Rs 98,000 crore of which 81 per cent funds will come from Japan in the form of loan. The project cost includes possible cost escalation, interest during construction etc.

According to the detailed project report proposed by Japanese International Corporation Agency (JICA), while most part of the corridor is proposed to be on the elevated track, there will be a stretch after Thane creek towards Virar which will run under the sea.

The Railways has already allotted Rs 200 crore for the Special Purpose Vehicle (SPV) in which Maharashtra and Gujarat will hold 25 per cent equity each and the Indian Railways will have 50 per cent.

The project is being funded by Japan with a soft loan for 50 years at 0.1 per cent annual interest with 15 years' moratorium. As per the loan agreement, the rolling stock and other equipment will be imported from Japan.

Feasibility studies for other high speed corridors -- Mumbai- Chennai, Delhi-Kolkata, Delhi-Nagpur and Mumbai-Nagpur – are on.

On the other hand China, which has the longest high-speed railway network in the world at over 19,000 km, plans to increase it to 30,000 km by 2020.