Shinkansen bullet trains are parked at a train yard in Tokyo, Japan. (Photographer: Tomohiro Ohsumi/Bloomberg)

Modi, Abe Lay Foundation Stone For India’s First Bullet Train

Prime Minister Narendra Modi and his Japanese peer Shinzo Abe on Thursday laid the foundation stone for India’s first bullet train between Mumbai and Ahmedabad.

The 508-kilometre high-speed rail corridor will cost nearly Rs 1.1 lakh crore. Nearly 90 percent of the project cost will come in the form of a loan advanced by Japan at an interest rate of 0.1 percent, to be repaid in 50 years with a 15-year grace period, the Press Information Bureau said in a statement.

The bullet train project will take care of high speed, high growth and high-end technology, said Modi.

“Japan has been a friend of India and this friendship has stood the test of time,” Modi said. The credit of ensuring the project reaches the ground-breaking ceremony within two years, goes to Abe, he said.

This investment will be as important as the entry of Suzuki in India 30 years ago which transformed the Indian automobile sector, said Railway Minister Piyush Goyal, who took charge of the ministry from Suresh Prabhu early this month. The feasibility and technical studies for the project were undertaken during Prabhu’s tenure.

The next growth of cities will happen along the high-speed corridor, said Modi. The project will cover 12 stations – Mumbai, Thane, Virar, Boisar, Vapi, Bilimora, Surat, Bharuch, Vadodara, Anand, Ahmedabad and Sabarmati. Once operational, the train is expected to service 1.5 crore travellers every year.

The government has advanced the completion timeline by one year to 2022. “When the train is inaugurated, the prime minister should take this train and arrive in Mumbai for its inaugural ceremony,” said Devendra Fadnavis, chief minister of Maharashtra, who was present at the event.

Also Read: Japan's Bullet Train Gives 164-Year-Old India Railway a Jolt

The bullet train project will be executed through National High Speed Rail Corporation Ltd., a special purpose vehicle. It will also see technology transfer and orders executed by Japanese companies like Mitsubishi and Hitachi.

The project will begin with setting up of a “High Training Centre” in Vadodara to train over 4000 employees. It is expected to generate over 20,000 jobs and lead to modernisation of the Sabarmati railway station.

“A strong India is in favour of Japan and a strong Japan is in favour of India,” said Abe. The high-speed train allowed the Japanese economy to enter a high-growth phase after the introduction of Shinkansen, the high-speed train, Abe said.

Nearly 100 Japanese engineers are already in India to begin work, Abe said. Indian companies like Bharat Heavy Electricals Ltd. along with Kawasaki will manufacture the rolling stock, he said.

Also Read: Abe-Modi Bromance May Not Overcome Hurdles to Submarine Sale

Follow The Latest On The Global Economy On BloombergQuint