Editorial: Getting bullet train project back on track

Prime Minister Narendra Modi reviewed the progress of the high-profile high-speed rail project, popularly known as the bullet train project, seeking information about the “adherence to speed and timetable targets”. The 508-km Mumbai-Ahmedabad High Speed Rail corridor is one of those projects that have witnessed repeated revision of deadlines, which indicates that the government did not realise or underestimated the complexities and magnitude and its execution in the Indian context.

When originally announced in September 2017, the government had set an ambitious target to complete it before August 2022 to coincide with 75 years of India's independence. But hurdles in land acquisition, a common problem dogging all massive infra projects in the country, and the COVID pandemic were major setbacks.

By the time the project is expected to be completed by 2029, the estimated cost of 1,08,000 crore is likely to be doubled. Now the government is admitting the complexity of the technology-intensive project and avers that exact timelines and cost can only be reasonably ascertained after the completion of all associated works.

Cost overruns in large complex projects are inevitable, but not factoring them in can be problematic. Being in denial or obfuscating it can only land the project in a muddle, as it happened with this project. The project caught the government off guard and forced it to be on the back foot.

The project, which is touted to be the prime minister’s brainchild, was in fact initiated by the UPA II government. Therefore, on the face of it, the Congress party’s criticism appears to be specious. The party, however, claims to have a far more nuanced position. It says it is not opposed to high-speed trains, but adds that it has concluded after due consideration that the NDA’s project is merely an exercise in vanity and a case of misplaced priorities. For the soft loan of Rs 88,000 crore from Japan, India has to shell out Rs 6,802 crores per annum to service the loan, while the projected revenue would be a little over half of the outgo, according to back-of-the-envelope calculations done by opposition parties.

Such is the complexity of the project that it is becoming obvious that the government’s usual style of functioning is unlikely to resolve the challenges faced by the project. With about 50% of the work being completed at a cost of Rs 67,486 crore, it needs to come up with a more realistic timeframe for completing the project. Secondly, it needs to factor in the risks associated with foreign currency loans, which are vulnerable to fluctuations. Thirdly, on the face of it, the project does not seem to be financially viable, especially in the short run, due to the high project cost. So, the government needs to come up with an innovative plan involving public-private partnerships and ancillary development of stations for land-value capture to reduce bleeding cash.

It will be an acid test for the government’s ability to not only complete a mega project but also make it viable in the long run. Especially when the numbers are stacked against it, giving credence to criticisms pertaining to high cost, economic viability, and misplaced priorities.