The High-speed rail corridor inaugurated by Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe in 2017 seems working very slowly. The in-process work seems not proceeding as per the plan for $22 billion (Rs 1.57 lakh crore) High Speed Rail Corridor connecting Mumbai and Ahmedabad. The project promises to cut down the distance between Mumbai and Ahmedabad to 3 hours by using Japanese-built Shinkansen bullet trains which is 8 hours at present. The completion date of the project is 2022 but sources say it will even miss its original deadline which is 2023 and was lately advanced to 2022.
The Development So Far
The officials associated with the project say the work has not stop, meetings and discussions are carried as and when required. He also mentions the primary land acquisition is done, about 39% of the 1,380 hectares earmarked has been acquired. Staffing has also begun.
The Tenders have been floated in Bilimora, Surat and Bharuch districts of Gujarat for bullet train stations and construction of Sabarmati Rail Hub (to be linked to bullet train stations).
The project hit two major problems in the past few months. The first and most affecting is the Entrant of non-BJP party in power in Maharashtra. The Shiv Sena, which heads the three-party coalition government in the state is not enthusiastic about the bullet train project. Newly elected Chief Minister Uddhav Thackeray said in December 2019 that the state would “review the project”. Sources also say that the new government could create obstacles for the project is concerning Japan.
The annual India-Japan summit which was to happen in Guwahati in December in December 19 would have been an important forum to reassure the Japanese side between prime ministers Modi and Shinzo Abe. The summit was cancelled due to the massive protests over the Citizenship (Amendment) Act or CAA in the eastern India. The new dates for summit not yet announced.
Japan’s Shinkansen Technology and Interest levied on India
PM Modi is bringing Japan’s Shinkansen technology to India. The Japan International Cooperation Agency (JICA) is providing a loan covering 81 per cent of the cost at an interest rate of 0.1 per cent per annum with repayment due over 50 years. The governments of Gujarat and Maharashtra are sharing the remaining cost.
The Japanese’s Head-ache
India walking out of the proposed Regional Comprehensive Economic Partnership Trade Pact RCEP free trade agreement (FTA) between the 10 member states of ASEAN and its six FTA partners, which includes China, Japan, India, South Korea, Australia and New Zealand seems a big damper to the Japanese investors.
Another problem hitting the investor’s mind is the social unrest in India over the controversy of CAA and NRC. This can lead to loss of confidence in investors planning FDI in the country. If it is prolonged, it could hurt India’s prospects as an investment destination. The situation is only frustrating the Japanese in such politically charged times and due to lack of assurance of return.