Japan has reportedly offered to finance India’s first bullet train project, which is planned between the western cities of Ahmedabad and Mumbai — a distance of 505km.
The loan, which is likely to cover 80% of the $15 billion project, will be granted at an interest rate of as low as 1%, provided India agrees to buy 30% of the required equipment — including coaches and locomotives — from Japan.
Japan’s International Co-operation Agency undertook the feasibility study for the project, which would reduce travel times between the two cities from 7hr to 2hr (with speeds up to 350kph).
Reuters reports that although India will ‘float’ tenders for construction and supply contracts, Japan would have an edge over other competitors, including China, if the loan proposal is accepted by the Indian government.
Indian Railway Board chairman AK Mital said: “While several players can offer the high-speed technology, for the combination of technology and funding together we only have one offer — that from the Japanese. What complicates the process is the Japanese linking of funding to the use of their technology. There must be technology transfer.”
The offer is being seen as an effort by Japan to vie with China, which recently won a major high-speed rail contract in Indonesia.
China is also involved in the feasibility study of a 1,200km high-speed train between Delhi and Mumbai, under a contract awarded last month.