The Union Cabinet in its meeting chaired by Prime Minister Narendra Modi has given approval for the largest foreign investment in India’s railway sector to set up India's first 500-km-long bullet train project connecting Mumbai to Ahmedabad, with the help of Japanese funds and technology. The cost will be Rs 98,000 crore. The formal announcement is expected during Japanese Prime Minister Shinzo Abe's visit that begins from December 11, 2015 where the deal is likely to be signed.
The decision comes on the back of the recommendations of a panel headed by NITI Aayog Vice-Chairman Arvind Panagariya, which chose the low-cost funding proposed by Japan International Cooperation Agency (JICA) at less than one per cent interest rate apart from a commitment for technology transfer and local manufacturing for a specified period. Further the panel in its recommendation had cited the accident-free record of the Japan`s high-speed trains.
JICA has offered to fund 80 per cent of the cost of the Mumbai-Ahmedabad project and had submitted a feasibility study in July on the 505-km (315-mile) Mumbai-Ahmedabad corridor offering to cut travel time to two hours from the current seven to eight hours. The Japanese loan of over Rs 78,000 crore will come with a 50-year tenure, along with a moratorium of 15-years.
Earlier in September, China was given the contract for a similar feasibility study for the 2,200-km Delhi-Chennai corridor. Also, an India-China consortium is conducting a separate feasibility study for the 1,200-km Delhi-Mumbai corridor. Apart from improving speed on existing tracks, China is also training Indian Railways engineers in heavy haulage and setting up a rail university.
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