Japan poised to win India’s Bullet Train deal
Japan is expected to win the right to construct India’s first bullet train network, after losing an Indonesian high-speed rail deal to China, the Nikkei business daily reported on Tuesday.
Japan will offer more than 1 trillion yen ($8.11 billion) in loans to construct India’s Rs 98,000 crore (Rs 980 billion) fast train network, according to the report.
Japan recently lost the bid to build Indonesia’s first fast-train because Beijing provided a $5 billion loan without guarantees.
Japanese Prime Minister Shinzo Abe, due to visit India this week, and his counterpart Narendra Modi are expected to issue a joint statement on the deal, the Nikkei said.
Tokyo was picked to assess the feasibility of building the 505 kms (313 miles) corridor linking Mumbai with Ahmedabad, the commercial capital of Prime Minister Narendra Modi’s home state, and concluded it would be technically and financially viable.
Construction of the high-speed railway link will start from 2017 and will be completed in 2023, the Nikkei reported.
Rivalry hot in high-speed rail exports
Japanese firms are desperately trying to stage a comeback in the competition for overseas high-speed rail projects, which are seen as a pillar of the government’s plan to increase infrastructure exports.
After losing out to rival China in Indonesia, domestic railway companies are ramping up efforts to win bids in the United States and Singapore. The true value of Japanese firms’ technological and sales abilities is being questioned.
The International High-Speed Rail Association (IHRA), which counts the Japan Railway companies, carriage manufacturers, trading companies and others among its members, hosted a conference in late November in Tokyo that was attended by people involved in high-speed rail from Europe, the United States and Asia.
“No other system is equal to Japan’s Shinkansen bullet trains in terms of safety, punctuality and environmental performance,” IHRA Chairman Masafumi Shukuri told the attendees in a speech.
A public-private fund, the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development, decided in November to invest $40 million (about ¥4.9 billion) in a Texas-based company planning a local high-speed rail project. The aim of the investment is to have Central Japan Railway Co.’s Shinkansen system adopted for the project. The planned line would connect Dallas and Houston, about 400 kilometers apart, in about 90 minutes.
The project is expected to cost about $15 billion (about ¥1.8 trillion) to build. The Japan Bank for International Cooperation is planning to finance half the construction costs, which would provide financial support for the bid.
In the competition over high-speed rail projects, the government was shocked when China won a bid for an Indonesian project. To stanch the bleeding, Liberal Democratic Party General Council Chairman Toshihiro Nikai met with Indonesian President Joko Widodo on Nov. 23.
“The Shinkansen isn’t all we have. We will gladly respond to any infrastructure improvements or other future needs you may have,” Nikai reportedly told Widodo.
Indonesia is planning an urban railway system for Jakarta, which the government hopes could be a second chance for Japan.
During a visit to Malaysia on Nov. 21, Prime Minister Shinzo Abe announced planned changes to the government’s official development assistance program.
These included no longer requiring that governments guarantee to cover 100 percent of any losses for certain projects, and that the application process, which currently takes about three years, could be shortened for important projects to as little as 18 months. The idea behind this is to provide support for projects by smoothing funding.Speech