Japan offers to fund Mumbai-Ahmedabad high speed rail corridor


By  Srinand Jha, Hindustan Times,

India’s ambitious plan to construct the Mumbai-Ahmedabad high speed rail corridor reached a decisive stage on Tuesday, following the Japanese government’s offer to fund the Rs 988,050 million project at a low interest rate of 0.25% at Tuesday’s meeting of the Indo-Japan Joint Monitoring Committee (JMC).

The Japanese government’s loan offer comes with the rider that 30% of the rolling stock for the project would be sourced from Japanese firms, sources said.

A financial rate of return (RoR) of 4% and an economic RoR of 12% has been projected on what will be India’s first high-speed rail line, which is estimated to have a daily ridership of 40,000 passengers.

From the initial estimated cost of Rs 650,000 million, the Japan International Cooperation Agency (JICA) — which recently completed a feasibility study on the line — has indicated a substantial cost escalation by factoring in components including price escalation during construction (estimated at Rs 172,212 million ) and interest during construction (estimated at Rs 115,709 million). Basic capital cost has been projected at Rs 700,129 million in the draft JICA report. More info