9:05 am - Thursday November 5, 2015

Bullet trains: Is Modi courting a dream or a nightmare?

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The one thing that gave me considerable cause for pause in Sadananda Gowda’s Railway Budget was his proposal for a bullet train between Ahmedabad and Mumbai.
Gowda said: “It is the wish and dream of every Indian that India runs a bullet train as early as possible…. Indian Railways is on its way to fulfil that long cherished dream. We propose bullet trains by starting off with an already identified Mumbai-Ahmedabad sector, where a number of studies have been done.”
Quite apart from the fact that Gowda is stretching the truth in claiming that “it is the wish and dream of every Indian” to ride a bullet train, I am not sure India needs bullet trains. Fast trains, yes, High-speed rail corridors, sure. But bullet trains between two cities at Rs 60,000 crore a pop? Hmmm.
Is a bullet train really needed. Reuters Is a bullet train really needed. Reuters
There’s a saying, be careful what you wish for, for you may get it. A bullet train may be something to impress the natives with and take “phoren” visitors on a show tour, but I doubt the idea has sound economics on its side.
Consider the cons.
First, a Rs 60,000 crore project to connect just two cities – which are anyway just a hour’s flying time away – may make no sense economically. The project will have to earn a minimum surplus of Rs 5,000-6,000 crore annually to service debts and capital. Gowda said the railways carried 23 million passengers daily on 12,617 trains. This works out to an average of less than one million passengers per train annually. Will the bullet train have enough traffic to justify the costs?
To generate a profit of Rs 6,000 crore annually, and assuming the bullet train traffic is a high one million passengers a year, the annual servicing cost of the investment would have to be Rs 60,000 per journey. Of course, there can be other streams of revenue, but just look at the impossibility of the basic math. And why build a project by creating commercial space or food courts to make it somewhat viable?
Second, a bullet train – largely meant for people who value time over money, which means the rich and better off only – should always pay for itself. It cannot be just a super-subsidised showpiece. When the railways are moving away from reducing passenger subsidies even to the poor, it would be criminal to set up a bullet train where fares have to be subsidised.
Third, since a bullet train needs all new infrastructure, it means a huge amount of land acquisition. After the UPA-legislated Land Acquisition Act, the money and effort involved in acquiring land for the Ahmedabad-Mumbai bullet train would not only be mind-boggling but mind-numbing. It could take all of five years. By which time, the cost of the project would have escalated. Remember, the route connects some of the most populated cities along the way and land won’t be cheap.
Fourth, the distance between the two cities is around 550 km. A high-speed train – which travels at 160-200 kmh (which is the proposed speed indicated for high-speed rail corridors) – would take all of three-and-a-half hours. This is not exactly a waste of time even for the truly busy. And with all the jing-bang of wi-fi and other services, anyone who travels on a high-speed train will not waste even this three-and-a-half hours in travel. Why would anybody use a bullet train at much higher cost just to save an hour or two?
The Anglo-French Concorde supersonic aircraft project was one of the biggest white elephants created by politicians keen on trophy projects. Driven by hubris rather than economics, it was perpetually loss-making. It was finally put out of misery when British Airways and Air France both decided that they had bled enough and allowed common sense to override vanity. The Concorde service, which brought down the New York-London fly time from eight hours to around three-and-a-half hours, ended in 2003.
India’s bullet train should not become another Concorde. This is not to say its viability should not be checked by experts, but commercial profitability should be the only guiding principle before a final go-no-go decision is taken.
As things stand, my own suspicion is that it won’t withstand the profitability test. A potential tiger economy does not need White Elephants to feed endlessly.
Some dreams are best left as dreams. Trying to realise them can turn into a nightmare.

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