With reference to Sunanda K Datta-Ray's column, "An extravagant thank you" (December 12), the Ahmedabad-Mumbai bullet train project at a cost of Rs 98,000 crore is not a viable one. Expected to cover 500 km, the investment works out to Rs 200 crore per kilometre.
How can we service 80 per cent of the loan offered by Japan for this project? The terms by way of a moratorium of 15-20 years and an interest rate of 0.1 per cent are prima facie favourable. The first class fare for the Shatabdi Express is Rs 2,000; the bullet train fare would have to be at least double that amount to be viable. At Rs 4,000, airlines would be competing with bullet trains on that route.
The next issue is the volume of traffic. A majority of travellers seek cheap-fare trains; 10 per cent may prefer super-fast or express trains like Shatabdi. Airlines and bullet trains would be competing for the remaining percentage of travellers. One way to make bullet trains viable would be to extend them to the Delhi-Mumbai route, which sees a lot of air traffic at present.
Then there is the matter of social cost. The investment for the bullet train project would be better utilised for improving railway facilities throughout the country. The government can draw up a proposal for international financing institutions that are willing to fund such projects on terms similar to the one offered by Japan for bullet trains.
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How can we service 80 per cent of the loan offered by Japan for this project? The terms by way of a moratorium of 15-20 years and an interest rate of 0.1 per cent are prima facie favourable. The first class fare for the Shatabdi Express is Rs 2,000; the bullet train fare would have to be at least double that amount to be viable. At Rs 4,000, airlines would be competing with bullet trains on that route.
The next issue is the volume of traffic. A majority of travellers seek cheap-fare trains; 10 per cent may prefer super-fast or express trains like Shatabdi. Airlines and bullet trains would be competing for the remaining percentage of travellers. One way to make bullet trains viable would be to extend them to the Delhi-Mumbai route, which sees a lot of air traffic at present.
Then there is the matter of social cost. The investment for the bullet train project would be better utilised for improving railway facilities throughout the country. The government can draw up a proposal for international financing institutions that are willing to fund such projects on terms similar to the one offered by Japan for bullet trains.
K V Rao, Bengaluru
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201 · E-mail: letters@bsmail.in
All letters must have a postal address and telephone number