[norhog]

Originally Posted by extreme_torque

How is that related to bullet train? We can buy more cars not because Maruti came in, because we opened the economy and more and more people have the money to buy cars. A more meaninful metphor would be to compare the deaths caused by accidents then and now.





No one wrote mobile phones off. Mobile phones were always desireable and they still are. The calls are a utility feature now and not a luxury. I am sure someone would have said the same thing about wired telephones. I dont see what is the relationship between the two. The only relation I can think of is that the same things were said by a BJP spokesman on a debate on national TV and you have said the same exact thing here.

Firstly please note I am no way a supporter of any political party. Believe me when I say I have not heard the comments you mentioned, it came to my mind
Next some analogy would be the space sector, ISRO, where a lot of investments have gone with the same "nay" sayers saying , if basics is not there why money in space sector.
Coming back to bullet trains the setting of the manufacturing facilities will have a positive effect on other IR factories by way of manufacturing process and product quality.
Once we have the capability here, in a few decades we can export this tech to say Africa which many are saying will be the next big thing.
Also the terms are here generous so money part is OK.
And lastly these statements are my own and not heard from somewhere. And if some one would have uttered it it would be purely out of common sense.

[Sawyer]

Probably an accurate summary of the project:
"As for whether the 1.1lakh crore project will be viable by the time the loan is paid off in the 50 years granted by Japan, you may need to think again. "I don't think even the Japan bullet trains are viable. Nowhere is it viable, but the real estate around it can be viable," said Dr Debroy."

A valid justification for the investment - but the problem remains that the returns on this real estate, by the time and to the extent they trickle down to the have nots, may be a case of too little, too late.

[sj_koova]

The only way I can read this is, there may be huge import duty subsidies for importing from Japan soon and the beneficiaries will be Adani or Ambani.

- Japan is heavily industrialized country. They have to find buyers for large exports.
- Adani and Ambani have to do all their loot business at tax payers cost, so they will keep influencing Govt for subsidies.
- For central govt, name and fame matters and also the funding for next election won't come easily.

And who is building the bullet train for India and at what margin?

Japan is not sitting there is to do charity for India. Business has to be the motive behind all these.

As Mahatma Gandhi said, development of India has to start at villages. Until that happens, everything else is eyewash.

[phamilyman]

Originally Posted by smartcat

Excellent financing deal (80% loan, 0.1% interest, 50 year tenure) offered by Japan makes the cost associated with this much more palatable.

Two issues:
a. Forex risk
b. What other high tech project could've yielded better benefits?

a. It is a yen denominated loan as in news articles - the very first image.
Thankfully since 2013, yen has actually fallen from 0.8 range to 0.58 range currently. That's good for us.


But if we must draw lessons, let's look at USD-INR, to assess the risks for a 50 year horizon. It has risen by ~30% in the same period (and much longer if you compare vs 2009-2011 era).


36000 pax/day for a 17 Bn project isnt bad at all. But a similar loan for a metro line would have much more impact on reducing pollution and improving quality of life.

Here's the ridership of Delhi Metro: 25.9 lakh per day FY16. The gross fixed assets (total investment till date) is just shy of 40,000 crore. Even if you were to cost it in today's rupees, it would come maybe a bit higher than bullet train project cost - but the benefit is incomparable.
http://www.delhimetrorail.com/OtherD...hYear20156.pdf

That said, if it includes technology transfer like in defense deals, then its really invaluable - but most of the discussion has gotten stuck on the price tag only. Does anyone have more specific details?

[SourabhSuresh]

With 40% of railway lines running at over 100% capacity and frequent accidents to boot, the need to upgrade our current infrastructure capacity is critical. CAG findings show that 95% of super fast trains are delayed. How can the bullet train buck this trend when it will be run by the same authorities? Indian Railways has a lot of inherent problems at the most basic level which has to be solved to make any investment worthwhile.
Bullet trains or not, without an integrated urban transport system which will ensure efficient last mile connectivity, the time saved on bullet trains will be squandered navigating our urban traffic mazes.

[Nav-i-gator]

So, usual negativity:

1. Burden on tax payer money - Farm loan waivers are bigger burden, so is (nationalized) bank recapitalization. In fact, Indian railways is probably the biggest burden on taxpayers' money.

2. Need to improve railways and existing tracks first - It's not a zero sum game. Investment in Indian railways improvement and expansion is going on. This project is additional. Nothing to do with Indian railways' existing plight as well.

3. Japan must be having huge economic benefits, they are not doing charity - Of course not. Japan will earn money (among other things) in 2 ways. almost 50% of loan would straight away go back to japan for technology, construction and asset creation/selling. Plus they will earn 0.1% interest, which though minuscule, is still far better than the interest rates in japan domestic markets. It's plain business sense. But again, it's not a zero sum game. Japan benefits from it does not mean that we are being ripped-off. Loans from IMF/WB are at much higher rates. Tell me a source which have given (or is willing to give) such a big loan for such a long term on such interest rates. I don't understand what is there in this project to oppose?

And why the rhetoric always point towards Adanis and Ambanis? They are businessmen, they invest, create assets, bring in new technologies, create wealth not only for themselves, but for investors, partners, employees and Govt, and actually fund a large part of subsidies to poor too (P.S. adanis and ambanis = Big business houses, a generalized term). I am sorry but this kind of rhetoric does not make a cut anywhere except for misplaced socialism and (of-course) politics.

[ksameer1234]

Originally Posted by phamilyman

That said, if it includes technology transfer like in defense deals, then its really invaluable

Looks like BHEL is going to manufacture rolling stock for bullet train. While many contracts will go to Japanese firms, there exists chances that these will have JVs to fulfill the orders. This project will definitely provide significant learnings and is aimed at being first of several bullet train routes.


For those wishing for government to spend this money on improving infrastructure, we need to realise that Japan certainly wouldn't have given loan on such favourable terms of such massive amount for repairing roads where Japan wouldn't have gained any business.

Bullet train does not eradicate hunger and poverty, certainly not. But eradicating hunger and poverty is not the only agenda for any government. Bullet train project could have been delayed by 5-10 years but that wouldn't have helped the cause of hunger and poverty, would it?

As for the demand, I am sure we all agree that there is definitely a demand for bullet train on Mumbai-Ahmedabad route. Maybe there are other routes with equal or more demand but this route isn't bad to start either.

[sgiitk]

Originally Posted by phamilyman

Two issues:
a. Forex risk
b. What other high tech project could've yielded better benefits?

a. It is a yen denominated loan as in news articles - the very first image.
Thankfully since 2013, yen has actually fallen from 0.8 range to 0.58 range currently. That's good for us.
Attachment 1676314

But if we must draw lessons, let's look at USD-INR, to assess the risks for a 50 year horizon. It has risen by ~30% in the same period (and much longer if you compare vs 2009-2011 era).
Attachment 1676315

36000 pax/day for a 17 Bn project isnt bad at all. But a similar loan for a metro line would have much more impact on reducing pollution and improving quality of life.

Here's the ridership of Delhi Metro: 25.9 lakh per day FY16. The gross fixed assets (total investment till date) is just shy of 40,000 crore. Even if you were to cost it in today's rupees, it would come maybe a bit higher than bullet train project cost - but the benefit is incomparable.
http://www.delhimetrorail.com/OtherD...hYear20156.pdf

That said, if it includes technology transfer like in defense deals, then its really invaluable - but most of the discussion has gotten stuck on the price tag only. Does anyone have more specific details?

The fact that Re / Yen has not changed adds a lot of confidence. As for the $ I expect the INR to appreciate somewhat as well.

There are two things to bear in mind, what will make the premium corridor viable is the development of land around the track. Also, there are many intangibles. What I am hearing ad infinitum is that with such a poor accident record, what should we do is to divert resources. Let us say, we stop all other work, will just diverting money help. No it is the 'chalta hai' mind set which will not change.

One may say, that a clean break with the old may have a better chance.

In any case, any new technology is always met with howls. At least the Japs are having an impeccable safety record. I have heard talk about the Chinese- well they are doing well but India - China have enough safety related issues in telecom.

[Saanil]

If I remember correctly, all such mega projects are usually pursued after making a feasibility report. By any chance, is it possible to get a copy of that? I am sure they must have factored in the currency movements and many other factors. We can debate over the absolute value of the assumptions but before that we need to see what all factors have been considered in evaluating the feasibility of the project.

Although I think the report will be confidential, in case we can get it, we an debate better with data as a support.

[sj_koova]

It is not negativity, but a reality check.
I have no problem Japan benefiting from the loan or India building a bullet train. Like I said, nobody is doing charity. There will be hidden agenda behind every big move like this.
You may want to read about how the business houses influence governments. Good one to start would be Business Maharajs by business historian Gita Piramal. Always good to know the past before speaking about present. It has nothing to do with which Govt it is. System always runs the way it is. Only the names of business maharajas change with the Govt change.
For that matter, Adani and Ambani is a generalized term for present state of affairs because anyone with an unbiased view will know where the Govt's bias is. 10 years back I would have taken different names. I am not speaking with clear evidence, it is just a rant of a socialist if you want to take it that way.
Every time I pay more for fuel and ridiculous increase in tax year over year, there has to be someone responsible for it.
As a sincere tax payer, I would like to see development in villages and rural India than a bullet train. That is my humble opinion.

[ksameer1234]

Originally Posted by Saanil

If I remember correctly, all such mega projects are usually pursued after making a feasibility report. By any chance, is it possible to get a copy of that?

This is it: https://www.jica.go.jp/english/our_w...00009v1z03.pdf

Originally Posted by sj_koova

As a sincere tax payer, I would like to see development in villages and rural India than a bullet train.

I don't think bullet train impedes the development of villages. There are many projects which are going on simultaneously. Roads in villages and expressways are built simultaneously. Same with railway projects. The learning from bullet train will trickle down for creating better rail infrastructure nationally.

[Nav-i-gator]

Originally Posted by sj_koova

Every time I pay more for fuel and ridiculous increase in tax year over year, there has to be someone responsible for it.
As a sincere tax payer, I would like to see development in villages and rural India than a bullet train. That is my humble opinion.

In the same vein, we should have problem with GOI extending billions of dollars as line of credit to Bangladesh, Sri Lanka, Mangolia, African countries etc too? And we should have problem with funding of ISRO, satellite launches, Defense spending, even having 1st class bogies in Indian railways?

This village romanticism is misplaced. There is development happening in villages, investment in urban areas is not at the expense of villages. All the Govts, including this one, has focused on poor and marginalized people - Subsidies, free services, no tax on agri income, loan waivers, MNREGA, rural electrification, rural roads and what not. The problem is not lack of investment or intent for that matter.

Development, irrespective of where it happens or to whom it is directly intended to (specially in infrastructure and asset creation) has incremental affect on overall development.

[ashwin1224]

People have the right to be apprehensive about mega projects purely because the costs associated with these projects automatically magnify the risks. And this is our money which is being subjected to the risk.

That being said, I dont think the HSR should be compared with the existing rail network. It is a parallel mass transit system, it is like comparing bus travel with rail travel or rail travel with air travel. The clientele is different, the prices are different, the experience is different and the purpose is different as well. It will ease the load from the existing rail network, allowing the government to conduct much needed upgrades and repairs to the traditional rail routes and trains.

There is a section of the people who can afford the extra cost if the service is convenient. Right now those people travel in the normal trains mostly because the flight connectivity between the propsed nodes, while being ample, isnt as much as is required. These HSR routes ought to be treated more like airlines come to think of it.

On a side note I, for one, am highly excited by this diplomatic intimacy with Japan. I just hope strong ties with the Japanese will ease some of the restraints on importing automobiles from Japan and enthusiasts in India can finally get a taste of some reasonably priced JDM goodness

[PetrolRider]

Originally Posted by sj_koova

- Japan is heavily industrialized country. They have to find buyers for large exports.

Slight correction, Japan has very less space for giant factories, they produce in Japan as much they can consume, rest of export production is outsourced to places like Taiwan. I am seeing similar setup here, where Shinkansen export manufacturing hub would be India.

Originally Posted by sj_koova

- For central govt, name and fame matters and also the funding for next election won't come easily.

Nothing wrong if those come from actual work done. We still praise Narasimha rao govt for economic boom in 90s. Don't we?

Originally Posted by sj_koova

And who is building the bullet train for India and at what margin?

Normally subsidiary PSUs of Railway and other 3rd party private and public sectors through Govt Railway contract like it happens currently.

Originally Posted by sj_koova

Japan is not sitting there is to do charity for India. Business has to be the motive behind all these.

Exactly, Geo political situations making them closer to India. When Trump is abandoning them and NK and China are jumping on their shore everyday, they will definitely prefer another Asiatic giant as their ally, won't they? And same goes for us.

Originally Posted by sj_koova

As Mahatma Gandhi said, development of India has to start at villages. Until that happens, everything else is eyewash.

Aren't we just doing that since Independence?


I think this is a good step and IR in fact needs such projects. Scope to make money for IR is reducing. They cannot increase passengers fare and due to competitive road and other transport sectors, freight has never been the same as before.

By the kind of bullet trains, they are targeting the salaried middle class who now prefer flying due to slow and unreliable train timings. This is the place where they will have margin to collect profit without facing political backlash.

Currently, many instances are there, where trains take longer to reach than road, making them highly irrelevant for many. Upgrading existing infrastructure would not bring any ROI; consolidation of inefficient routes would be political suicide. They need investment in an area which would bring ROI in long term.

The cost of Rs 88000 cr is initial cost including capacity building and infrastructure set up. I am no expert, but I can safely bet setting of an airline would cost much higher. And if my memory is correct, I read somewhere that there are plans to run in other high density sectors also.
When we are talking about railways 50 years is a very relevant time frame, our current railways are already running for over 160 years. Once the break-even point comes through, the money generated form these shall be utilized where needed.

I think the whole point of bullet train is to stop railways going Air India way.

[Simhi]

May be off topic but asking out of curiosity - Is track / gauge going to be used by Shinkansen trains compatible with our existing broad gauge? Basically, why not use the new infrastructure to run our existing trains at high speed too - may be not at 300+ kmph but at least 160 to 180 kmph. Many times I hear that our existing wagons and engines are capable of 180 kmph but they don't run at these speeds due to our existing tracks.