Here's Why PM Modi Should Ignore The Critics and Go Big on Bullet Train
Bullet trains have failed in other countries because of poor ridership and lack of revenue. This problem is not likely to happen in massively populated India.

New Delhi: The government has promised that India’s first bullet train will be operational within five years.

The Mumbai-Ahmedabad High Speed Rail (MAHSR) project received Cabinet approval in 2015 and within two years, construction had started. The government had earlier set a deadline for December 2023. However, Union Minister for Railways Piyush Goyal announced last year that the government had advanced the date of completion by more than a year.

Goyal said the bullet train will make its first trip between Mumbai and Ahmedabad on August 15, 2022 — when India completes 75 years of Independence. But what will it take for the bullet train to succeed in India?

Wherever the bullet train has failed, it has been because the ridership has been far below expectation. For India, its massive population will serve as an asset in that regard. The answer to whether it will be a success may not be less bullet trains, but more.

The government has already started planning six more high-speed rail (HSR) projects across India and the key is to keep HSR ticket prices low enough so that they can compete with air fare.

In 1964, Japan entered a new phase of technological advancement as the first Shinkansen Train, colloquially referred to in English as the ‘bullet train’, ran between its two largest cities Tokyo and Osaka.

It now covers 2,764.6 km of Japan and its annual ridership has grown exponentially. The Shinkansen offers a comfortable ride and boasts of a zero-accident record. However, as Japan moves forward, the Shinkansen’s ridership is expected to drop. This is why Japan is now looking to sell the idea of the high-speed rail (HSR) to other countries, particularly to emerging markets.

Locked in a competition with China, which runs the largest HSR network in the world, Japan has struggled to find buyers. After years of negotiations with the United States, where a rail link between Los Angeles and San Francisco is in the offing, Japan finally found success in India. But the only other country which runs a Japanese bullet train does not, unfortunately, offer a success story.

Taiwan, a small island-nation to the South East of China, has been operating the Shinkansen under the name Taiwan High Speed Rail (THSR) since 2007. The THSR connects the nation’s capital Taipei with the southern city of Kaohsiung. The 362-km journey takes just an hour and a half. But despite promising a comfortable ride through the island, the THSR is a financial disaster.

THSR estimated that its ridership would be 2.4 lakh passengers a day by 2008. By 2014, however, the number was just over 1.3 lakh, almost half the expected number. Its inability to turn profits, due to low ridership, affected its ability to back the Japanese loan. This, in turn, drove up ticket prices, further discouraging passengers. The

Taiwanese government recently had to give the THSR a financial bailout to keep it afloat. So the only example of a Japanese bullet train that isn’t run by the Japanese is widely considered to be a failure.

Yet, India is no Taiwan. Taiwan has a population of 23.55 million or 2.3 crore people. For context, the combined populations of Mumbai and Ahmedabad, the two cities that will be connected by India’s first bullet train project, is nearly 24 million or 2.4 crore people. The bullet train will connect Mumbai and Ahmedabad and will be linked by a total of 12 stations. The train will stop at Mumbai, Thane, Virar, Boisar, Vapi, Bilimora, Surat, Bharuch, Vadodara, Anand, Ahmedabad, and Sabarmati stations.

Taiwan High Speed Rail suffers from a lack of ridership, a problem India is unlikely to encounter.

Critics of the Mumbai-Ahmedabad High Speed Rail (MAHSR) argue that it would be out of reach for the common Indian and would be the preserve of the rich, who can afford air travel anyway.

Infrastructure expert Akhileshwar Sahay disagrees. “Between 2000 and 2005, a large number of so-called experts proclaimed to the world that an upcoming project by the name of ‘Delhi Metro’ would be a White Elephant. They said the common Delhiite would never use the Metro and prefer, instead, to take DTC buses. Today, Metro is not only the lifeline of Delhi, but the problem is quite the opposite. There is a lack of coaches and trains to cater to so many riders. Any new technology is met with the same concerns. The bullet train will find enough passengers.”

On the financial front, too, India doesn’t have to worry as much as Taiwan did.

The MAHSR project is a joint venture between Indian Railways and Japanese firm Shinkansen Technology. The total estimated cost is Rs 1.08 lakh crore for the first rail link. Japan has agreed to give a soft loan to India, which will fund 81% of the entire project.

According to the Ministry of Railways, such a loan from a body such as the World Bank would carry an interest of 5-7% with a repayment period of 25-35 years. However, the Japanese loan comes at an interest rate of 0.1% and India can repay it over a period of 50 years. The Indian government went as far as to say this loan was “tantamount to a grant”. The government of India will directly bear the rest of the cost.

The project is expected to generate employment as well since over 20,000 people will be employed during the construction and will be used for similar projects in the future.

Around 300 Indian Railway employees are currently being trained in Japan and an additional 4,000 will be trained at a High Speed Rail Training Institute in Vadodara, which will be operational by 2020.

But if Taiwan presents the example of a failed HSR project, there are plenty of success stories that are, perhaps, closer to the Indian experience.

South Korea’s High-Speed Rail started in 2004 with a daily ridership of 71,000. Today, it has more than doubled to 1.5 lakh daily passengers.

Japan’s own example can serve as an indication of the bullet train’s success, where the Shinkansen’s annual ridership is at 370 million or 37 crores.

China is helping Thailand build a HSR project from China to Bangkok and also in the neglected northeastern Thailand, where development has remained sluggish due to lack of transport.

Malaysia and Singapore are building a HSR link between Singapore and Kuala Lumpur. Western European nations such as Germany, France and Spain are also successfully operating HSR trains.

Given that India’s population far outstrips all these nations, lack of ridership is unlikely to be a concern. Even as the construction of the MAHSR project is being rolled out, the government is currently reviewing the feasibility of six other high-speed rail links. These are the Delhi-Mumbai, Delhi-Kolkata, Mumbai-Chennai, Delhi-Chandigarh, Mumbai-Nagpur and Delhi-Nagpur high-speed rail links.

The challenge will be to keep ticket prices competitive with domestic air fare.

However, according to Akhileshwar Sahay, financial profit or loss should not be the marker of success for a bullet train. “I’m telling you now, the bullet train will not make a profit. But that doesn’t mean it won’t be a success. There are many indications we have to look at. For one, as crude oil prices continue to grow, so will the popularity of the bullet train. Secondly, this is absolutely necessary to reduce the carbon footprint.”

As a more environment-friendly option emerges and air travel gets saturated — with India’s annual air passenger count crossing the 10 million mark last year — the Indian government would do well to promote the HSR as a viable alternative to air travel.

In this regard, the example closest to India is that of its neighbour and rival China. China, like India, is a country of continental size and a population that exceeds that of India. The 1,247 km trip between Beijing and Shanghai now takes just 4 hours and 28 minutes, with 100 million or 10 crore passengers using just this line every year.

While the Chinese Rail Corporation has run up a debt, the loans are mostly used for expansion. Today, the high-speed rail in China runs on 9,356 km of tracks, including the world's longest line, the Beijing-Guangzhou line, which is 2,298km. And China is expanding still.

According to one estimate, 415.4 million or 41.54 crore passengers flew on domestic airlines in China. The high speed rail, in contrast, ferried 910 million or 91 crore people that year.

If China’s example is anything to go by, over the next few decades Indians will be taking the train a lot more instead of burning jet fuel.