Mains Paper 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.
The following things are important from UPSC perspective:
Prelims: Shinkensan Technology
Mains level: Shortcomings of Bullet Train project.
- This article appears in the background of recent launch of high speed bullet train project between Mumbai-Ahmedabad.
Why the project is not big bang reform for all but a big bang bullet for few?
- Japan introduced its high-speed Shinkansen line between Tokyo and Osaka in 1964 with top speed of 210 km/hr which has now reached 350 km/hr.
- Ten more countries have also developed high speed train networks like France, Germany, Italy, Spain, South Korea, Turkey and with China having the biggest network of high speed trains.
- But none of them are using Shinkensen technology, so is shinkensen technology the best? No technical evaluation comparing other available systems seems to have been done
Transfer of Technology
- Shinkensen technology was offered to China by Japan, but the deal stuck on the issue of transfer of technology.
- The government has been mentioning about how raw materials, labourers, services for the project will be sourced from India but there has been no mention of transfer of technology.
- The issue is how Indian engineering going to leap forward if there will be no transfer of technology? And if there was no technology evaluation also, was there any validity report? Yes, it was there but the officialdom has refused to share the report even in response to RTI applications.
- Taiwan installed Shinkensen technology through BOT( Build Operate Transfer) Model of investment in 1990s with investment of $ 14.3 B which became operational in 2007 but by 2014 the rail operator was bankrupt with cumulative losses of $1.5 billion.
- The BOT model was not even floated as a trial balloon for the very good reason that no private company would have bid for the project — the failure of the much less capital-intensive Metro project (BOT).
- UPA government had earlier rejected the Bullet Train project as being completely unviable. That’s probably because projections show that the Mumbai-Ahmedabad train service will need to carry nearly one lakh passengers a day to keep fares at a reasonable level. The current traffic is only about 18,000 per day, which means that either fares will have to be raised well above air fares, or that the system will have to be subsidised in perpetuity.
Interest free Loan
- The Japanese are giving a 50-year loan of Rs 88,000 crore at .10 interest rate , but the interest rate on 10-year Japanese government bonds is 0.04 per cent and other interest rates can even be negative. So no question of Japanese benovalence arises.
- The difference in interest rates between India and Japan (our 10-year government bonds yield 6.5 per cent), has another, serious and long-term implication. According to a financial analyst, if we consider average Indian inflation at three per cent, and Japanese at zero per cent, the rupee will depreciate three per cent every year vis-a-vis the Japanese yen. So over 50 years, the sum to be repaid will not be Rs 88,000 crore but could be well over twice that amount.
Make travel faster?
- According to Bibek Debroy,only five per cent of Indians use our present super-fast trains because they find the extra fares beyond them.
- In short, bullet trains are going to make travel faster for five per cent of the population, which already has the option of air travel.
The Cost Analysis
- The Bullet Train project is going to cost Rs 1,10,000 crore; in last year’s rail budget, the total outlay for the entire Indian railway system was Rs 1,21,000 crore and it will serve a small percentage of people travelling between two cities; the Indian railway system, with over 13,000 trains running every day, carries more than eight billion passengers per year plus 1,000 million tonnes of freight over the whole country. The cost for the two, as the figures show, is virtually the same.
So, the bullet train project does not seem to be a complete success in future.
- Shinkansen literally means new trunk line that refers to the high-speed rail line network in Japan.
- Shinkansen uses a range of advanced technology which helps the trains attain high speed without compromising on safety and comfort.
- Shinkansen routes are strictly off-limits to any other kind of traffic, unlike conventional rail lines which are built without road crossings.
- These high-speed train network uses tunnels and viaducts to go through and over obstacles rather than around them.
- Shinkansen trains are electric multiple units, offering fast acceleration, deceleration and reduced damage to the track because of lighter vehicles.