Tag Archives: bullet train corridor between Mumbai and Ahmedabad

Indian Railways ‘mechanism’ to soon fix passenger fare rates

Indian Railways is planning to set up an independent institutional mechanism for deciding passenger fares and freight tariff based on efficiency, says Railway Minister Suresh Prabhu. He added that Railways is eyeing to save Rs 5,000 cr elsewhere.

Indian Railways “…will have an institutional mechanism which will take into account the efficiency to decide passenger fare and freight rate,” Railway Minister Suresh Prabhu said here today.

Asked whether it will be called Rail Tariff Authority, Prabhu said, “Nomenclature has not been decided yet but it will be a new mechanism altogether in Indian Railways.”

He further said that there will be a new law enacted by Parliament for the purpose.

“We will consult with Opposition on this and we will create a new law,” Suresh Prabhu said.

On energy efficiency, the Minister said Indian Railways is taking initiatives to save Rs 5,000 crore on energy bill in the next three years.

“Energy bill is the second biggest challenge for Indian Railways. We are taking various measures to reduce energy bill like going for solar power, wind energy and other energy conservation measures,” he said.

Currently, Indian Railways spend about Rs 22,000 crore on diesel and about Rs 13,000 crore on electricity.

On bullet train project, he said the JICA report on Mumbai-Ahmedabad high speed rail corridor project is being evaluated by the government to decide the future course of action on India’s first bullet train.

“The Japan International Cooperation Agency (JICA) has done a feasibility study on Mumbai-Ahmedabad high speed rail corridor. The government is evaluating it and accordingly a decision will be taken,” he said.

Besides Indian Railways, Finance Ministry, MEA and Niti Ayog are evaluating the report, he said, adding that such a project of this magnitude is happening for first time in India.

India’s maiden bullet train corridor between Mumbai and Ahmedabad will cost nearly Rs 1 lakh crore and the first train can run in 2024 if work begins in 2017, according to a final feasibility report on the project prepared by the JICA.

JICA in its report submitted to the Railway Ministy today envisages a reduction in the travel time on the 505-km long corridor between the two western cities to two hours from the existing over seven hours.

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Posted by on November 5, 2015 in Uncategorized


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Bullet train project to cost Rs 1 lakh cr

India will have to spend approximately Rs 1 lakh crore for its first bullet train corridor between Mumbai and Ahmedabad, preparatory work for which has gained speed.

In its latest interim report submitted last week, Japan has factored in the cost escalation through the years that it will take to finish the project. The amount, around Rs 98,000 crore, could rise a bit more.

Based on estimates from the Japanese team working on the feasibility study for the proposed 550-km corridor, Railways has circulated a 21-page inter-ministerial concept note detailing the way it intends to go about  implementing the project.

From an earlier estimate of around Rs 62,000 crore, the concept note’s figures seem to have jumped to Rs 70,000 crore at 2014 prices. The interim report estimates 40,000 people will use the corridor daily by 2023. After the commissioning of the works, it will take around eight years for the first bullet train to hit the tracks.

The project estimate got a reality check after Finance Ministry, in its response to the concept note, highlighted that the estimate of Rs 70,000 crore did not factor in costescalation and tax to be paid to the government.

The Ministry has now asked Railways for a copy of Japan’s interim report to study it further. Railways, in turn, has asked the Japanese team to give detailed estimates based on multiple technological options available to see if using any particular technologywould lead to a significant variation in prices. The final report is expected in June.

The note says “discussions indicate” Japan International Cooperation Agency might agree to fund 85 per cent of the project in which construction and procurement costalone is around Rs 49,504 crore. Other major expenditure heads are Consulting ServiceCost (Rs 2,190 crore); land acquisition (Rs 10,248 crore); a contingency fund (Rs 3,334 crore) and the implementing agency’s management fee (Rs 4,700 crore).

The project may also bleed India’s coffers as its rate of return is projected to be only around 3-4 per cent. Railways considers a project economically viable if it has a rate of return of at least 14 per cent. But Railways said the bullet train’s “economic rate of return”—its contribution to the economy by the virtue of saving manhours and connecting two major cities—would be upwards of 11 per cent.

The concept note is a precursor to handing over the the job of the project’s implementation to Rail Vikas Nigam Limited (RVNL) and its subsidiary, High Speed RailCorporation (HSRC). Railways has argued that the job be given to RVNL as opposed to creating a new entity for this project.

The Cabinet will decide if the job can be given to RVNL on a nomination basis; a cabinet note will be moved after evaluating response from other ministries. RVNL would require a fresh mandate from the Cabinet since its original mandate was to take up “viable and bankable” projects along the Golden Quadrilateral.

A section of the ministry has also been in favour of assessing multiple available options before zeroing in on an agency. An earlier Rail budget had said a High Speed Rail Authority would be created for this. Another Rail PSU, IRCON had last year sent a letter to Railway Ministry seeking to be considered for the job. The HSRC’s formation did not have the vetting of the Railway Ministry’s Finance directorate, but sources said Railways has internally resolved that issue.

Indian Express

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Posted by on April 13, 2015 in Uncategorized


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