[Maveryq]

For several commentators in the public space, disparaging a urban transport initiative is a lazy option and one which finds a lot of support in their siloed echo chambers.
However, such public infrastructure, especially one that has possibility of scaling up in terms of capacity is a critical part of forward planning.

What happens to such so called "experts" when they are proven wrong. Is there ever a mea culpa? A public acceptance of their folly?
Ms. Vandana Gombar made massive assertions in support of BRTS. This was in April, 2006. She roped in several experts from Dr. Dinesh Mohan to Mr. Nasser Munjee who supported BRTS in New Delhi over the then nascent Metro. Today they have been proven wrong.

Ms. Gombar's Article:http://www.rediff.com/money/special/metro/20060403.htm
And the current reality of BRTS in New Delhi -https://qz.com/460647/after-years-of-commuter-agony-and-crores-of-rupees-delhis-infamous-brts-is-being-scrapped/
Though we have the luxury of hindsight, but who pays the price for the naysayers who try to delay progress using specious arguments?
Ms. Gombar has moved onto Bloomberg New Energy Finance and is hard selling renewables. From being a transportation expert, she has evolved into a renewable energy expert.
How do we bring in accountability for these so called experts who have the power of molding public opinion without any repercussions if things go south.

Amazing.

[maddy42]

Originally Posted by Maveryq

Ms. Gombar has moved onto Bloomberg New Energy Finance and is hard selling renewables. From being a transportation expert, she has evolved into a renewable energy expert.

How do we bring in accountability for these so called experts who have the power of molding public opinion without any repercussions if things go south.

Amazing.

These experts are above the law.

My 2 cents and i am just sticking to the infrastructure aspect of our country. I do realise the skepticism of large projects with the project costs and return on investment etc, most of it comes from our trust of the politicians and bueracrats who time have again excelled in making a fool of us and continued with their mockery of the law and thrived while the common man has been held holding the purse for the same.

But in the last 2 decades we have seen some projects which have shown that there is some part of the system which stand out. To list a few:

1) Konkan railway(Tunnels in this project was dug by hand and not TBM). One of the most profitable routes for the railways, and was one of the smoothest in terms of land aquisition.

2) Delhi Metro - Japs helped make Delhi move. This project set the benchmark and led to every city wanting one of their own!

3) Mum - Pune expy- This project basically helped Pune more than mumbai and opened the business and tourism circuit in the region. Travelling between two cities was never easier.

4) Delhi Agra and Agra Lucknow - First project is popular, while the second not so much, but reduced the travel time. What is great is that the project was conceived and delivered in record time, unlike other projects where the foundation stone and the ribbon cutting is done by different generations decades later!

5) Nice project - This is controversies child, but travelling between two ends of Blr was never so smooth. Yes there are issues, but i really hope the complete NICE project gets done. The plan was for a ring road round Blr and a Mys-Blr connector. Only a semicircle round blr is completed. This project is a best example where politicians have shown their true color. No one has the guts to get this project complete due to the Three party democracy in our state. Due to the delay the Mysore Blr state highway is more of a parking lot, where on a peak traffic the speed is somewhere in the range of 45kmph and the towns on either side of the highway engulfing it literally!

There are more bullet train routes being planned, let us hope that more projects begin!

Maddy

[Sarath_MoJa]

Do the maths: India's first bullet train isn't 'free of cost'

India may have to repay much more than Rs 88,000 crore over a 50-year period because the rupee will most likely depreciate against the Japanese yen over a long period.Why is this? Simply put, it’s because the exchange rate between the currencies of two countries is determined by their inflation differential. If India’s inflation rate is average 3% over the next two decades and Japan’s inflation rate is zero, as is widely anticipated, then it stands to reason that the rupee must depreciate 3% every year because the rupee’s value is eroding by 3% as against no erosion in the yen. So, the rupee is bound to weaken by over 60% in two decades. This means that on a loan of Rs 88,000 crore, the repayment, in rupee terms, goes up to more than Rs 1,50,000 crore at the end of 20 years.

Over 50 years, the repayment value will be much higher based on the inflation differential, which is bound to persist between Japan and India because the latter is a rising economy with a sizeable poor population and is striving to become a middle to high income country over the next few decades. India, therefore, could end up paying a much higher value of rupee debt over 50 years. If this happens then we are not being fair to the successive generations, which will be saddled with this high debt component. Inter-generational equity is an important aspect of national debt accumulation even if it is a yen loan coming at 0.1% interest rate.
After all, the loans will have to be paid back with the exchange risk built into it. The yen is considered the most volatile currency among all the hard currencies today.

Another factor to be considered is that while an interest rate of 0.1% may appear free from an Indian perspective, it is not so in Japan. Japanese short term interest rates (Tokyo Inter Bank Offer Rate) is 0.06%. The interest rate offered by ten-year Japanese government bonds is 0.04%. India’s ten-year government bond offers 6.5%. The gap between Japan’s 0.04% and India’s 6.5% is explained by the inflation expectations in the two countries. This perspective cannot be lost sight of. So what you pay back to Japan in rupee terms will be way higher than what you borrow.

Courtesy : Business Standard

[Lobogris]

Originally Posted by Sarath_MoJa

Do the maths: India's first bullet train isn't 'free of cost'

India may have to repay much more than Rs 88,000 crore over a 50-year period because the rupee will most likely depreciate against the Japanese yen over a long period.Why is this? Simply put, it’s because the exchange rate between the currencies of two countries is determined by their inflation differential. If India’s inflation rate is average 3% over the next two decades and Japan’s inflation rate is zero, as is widely anticipated, then it stands to reason that the rupee must depreciate 3% every year because the rupee’s value is eroding by 3% as against no erosion in the yen. So, the rupee is bound to weaken by over 60% in two decades. This means that on a loan of Rs 88,000 crore, the repayment, in rupee terms, goes up to more than Rs 1,50,000 crore at the end of 20 years.

Over 50 years, the repayment value will be much higher based on the inflation differential, which is bound to persist between Japan and India because the latter is a rising economy with a sizeable poor population and is striving to become a middle to high income country over the next few decades. India, therefore, could end up paying a much higher value of rupee debt over 50 years. If this happens then we are not being fair to the successive generations, which will be saddled with this high debt component. Inter-generational equity is an important aspect of national debt accumulation even if it is a yen loan coming at 0.1% interest rate.
After all, the loans will have to be paid back with the exchange risk built into it. The yen is considered the most volatile currency among all the hard currencies today.

Another factor to be considered is that while an interest rate of 0.1% may appear free from an Indian perspective, it is not so in Japan. Japanese short term interest rates (Tokyo Inter Bank Offer Rate) is 0.06%. The interest rate offered by ten-year Japanese government bonds is 0.04%. India’s ten-year government bond offers 6.5%. The gap between Japan’s 0.04% and India’s 6.5% is explained by the inflation expectations in the two countries. This perspective cannot be lost sight of. So what you pay back to Japan in rupee terms will be way higher than what you borrow.

Courtesy : Business Standard

So what? By this logic, no major infrastructure project should be started as it would saddle the future generations with debt. What about total national debt which is around 400 billion $ and rises each year? What about the budget deficit each year which is funded by debt to be paid by future generations? What about farm loan waivers which alone for this year are more than the total cost of this much maligned bullet train?

In any case, even 150,000 crores, which is around 25 billion $ is an insignificant sum for India. For it to be paid in 50 years, I don't see why we are even discussing such a trivial sum. This decade alone, India has given lines of credit worth at least 10 billion $ to other nations in Asia and Africa.
India's defence budget is around 40 billion $ each year and is rising substantially each year.

There is a 20 year payment holiday. After 20 years, the fares are likely to be at least 10,000 per person. Our paying capacity would increase at least fourfold in twenty years. Today India is a nearly 3 trillion $ (3000 billion) economy. In twenty years, even at a modest average growth, we should be at least 10 trillion and more likely perhaps even 15 trillion. This would make the repayment of such a trivial sum even easier.

[Sarath_MoJa]

I always welcome any infrastructure initiative that the government puts forth. I Just want to emphasize the point that this is not a free lunch as claimed by the supporters of the Government. Just to put that perspective.

And me personally associated with BHEL, is double happy that we are going to supply the Rolling Stock for this prestigious project.

Originally Posted by Lobogris

So what? By this logic, no major infrastructure project should be started as it would saddle the future generations with debt. What about total national debt which is around 400 billion $ and rises each year? What about the budget deficit each year which is funded by debt to be paid by future generations? What about farm loan waivers which alone for this year are more than the total cost of this much maligned bullet train?

In any case, even 150,000 crores, which is around 25 billion $ is an insignificant sum for India. For it to be paid in 50 years, I don't see why we are even discussing such a trivial sum. This decade alone, India has given lines of credit worth at least 10 billion $ to other nations in Asia and Africa.
India's defence budget is around 40 billion $ each year and is rising substantially each year.

There is a 20 year payment holiday. After 20 years, the fares are likely to be at least 10,000 per person. Our paying capacity would increase at least fourfold in twenty years. Today India is a nearly 3 trillion $ (3000 billion) economy. In twenty years, even at a modest average growth, we should be at least 10 trillion and more likely perhaps even 15 trillion. This would make the repayment of such a trivial sum even easier.

[sri_tesla]

Originally Posted by Sarath_MoJa

I always welcome any infrastructure initiative that the government puts forth. I Just want to emphasize the point that this is not a free lunch as claimed by the supporters of the Government. Just to put that perspective.

What they meant is its essentially interest free when you consider the 15 year moratorium period, 0.1% interest and 50 year repayment duration. If you compare that to what many states are taking loans then it will definitely a much better deal.

Telangana state is building coal power plant of 4,000 MW capacity. Telangana state govt has taken loan of Rs 21,000 crores from Rural Finance Corporation (RFC) and Power Finance Corporation (PFC) at an interest rate of 10%. Yes, you heard it right. Its 10%.

Both those RFC and PFC are central govt companies and giving loan at just paltry 10%. That too for such a large amount. By the way, the machinery for the power plant is also being built by BHEL only.

[Sarath_MoJa]

These are 2 different situations. In Case of the Bullet Train, the loan is from an external agency outside the country whereas in case of a loan from PFC or REC, it the money of the PSUs within our country just changing hands from Central to State back to Central Govt. So the case of an external/foreign agency does not arise in this case. By the way, almost all central and state power projects in our country are executed on loans from PFC or REC at similar interest rates as in the case of Telangana project.
Hence at the end of any project, all eyes should on where ultimately the money flows to, whether it is within the country or outside and not focused on the interests rates alone.

Originally Posted by sri_tesla

What they meant is its essentially interest free when you consider the 15 year moratorium period, 0.1% interest and 50 year repayment duration. If you compare that to what many states are taking loans then it will definitely a much better deal.

Telangana state is building coal power plant of 4,000 MW capacity. Telangana state govt has taken loan of Rs 21,000 crores from Rural Finance Corporation (RFC) and Power Finance Corporation (PFC) at an interest rate of 10%. Yes, you heard it right. Its 10%.

Both those RFC and PFC are central govt companies and giving loan at just paltry 10%. That too for such a large amount. By the way, the machinery for the power plant is also being built by BHEL only.

[SourabhSuresh]

In 1837, the first railway in India was designed by Arthur Cotton to run between Red Hills and Chindadripet in Chennai. Railways was a hot new technology that was just started in Europe and here this guy Cotton was building it in a colony.

It didn’t carry any humans. 16 years later would be built the first passenger railway between Mumbai and Thane carrying humans and changing the future of Mumbai.

Why not more efficient bullock carts our keyboard warriors might have asked had they been alive and had they found a keyboard. Maybe the better bullock carts would have been sufficient for Red Hills-Chindradipet and Mumbai-Thane routes. However, those small routes would eventually become the blueprint to cover the whole nation. Who could have imagined India’s lifeline to be that hot new tech designed for Europe?

Sir Cotton was a genius, visionary and did amazing things in south India.

Technology development doesn’t work linearly. We don’t need to or have to have great bullock carts before we have railway lines. We don’t need to think about the limited application in the initial days. Every great technology starts off in its limited application before flowering to bring applications unheard-of.

Dr. Vikram Sarabhai did a Arthur Cotton when he developed the genesis of India’s space program with simple sounding rockets. Eventually, that tech would go on to do amazing things for India. We didn’t need to have perfect whatever before we could have rockets and satellites. We didn’t need to have perfect whatever to get onto the software services revolution.

In the same way, we don’t need to have perfect railways lines before embarking on bullet trains. It never works that way. Just as the young railway lines changed the future of the country, new technology — from satellites to missiles to robots to computers to bullet trains could change our future in unpredictable ways.

We cannot wait until everyone has food, jobs, and safety before we embark on technology development. In fact, it is the technology development that will bring everyone their food, jobs, and safety. Japan was not a rich country when they started building their bullet trains. They became rich later. Same with China and every other country that embarked on building advanced tech.

When the US sent humans to the moon in 1969 they had poor people. However, they took the gamble and the resulting progress of JPL and other projects indirectly helped create Silicon Valley and other areas.

The perils of a democracy are that everyone has a voice, and we keep navel-gazing and second-guessing every decision. That is the reason why we are a Republic — a representative democracy. While people are good at judging leaders they are terrible at judging policies and technology.

We get a generous 0.1% loan from Japan and both sides benefit from this arrangement. Not investing in bullet trains would not magically make our tracks more secure. It is not taking any money off our safety budget. And it could spark development in the region in ways we cannot imagine now. Who would have thought the shabby little train between Red Hills and Chindadripet would change the country?

We will always have a problem and there is no time better than now to get started on great tech. There is a proverb in Tamil: if you want to swim in the ocean, you cannot wait for the waves to end.

People keep commenting flights as newer tech — flights are a century old tech. And flights are such a pain. I travel twice a week and I would prefer trains any day if it can get as fast. From Bandra/south Mumbai to Santa Cruz it is a minimum 45-min ride and I need to be 45 min early for the flight. The flight time is 1 hr and I get to the terminal with the baggage 30 min later. That is 3 hours in total. The train is 2 hours with a quarter of the hassle. It will be a no-brainer for most businessmen.

Most importantly are 10 cities in between — Surat, Baroda etc. They would be the ones most to benefit as their commuters would get in and out to another city in minutes. It is basically like having a metro line between Mumbai and Ahmedabad. Just imagine that — getting between two cities in minutes. We will bring India closer like never before. Like what Sir Arthur Cotton did.

Source — Mr. Balaji Viswanathan's answer on Quora

[Nissan1180]

I dislike a lot of things that're happening in our country under the present leadership (those which are affecting me, like the fuel price hikes when the international prices are low). However, I'm happy about the bullet train. If anything, this will shake up the phenomenal bulk of the Indian Railways (IR). My friend's dad works at a senior level in the IR. He pointed out to me the problem that the Govt. faces. The railways team has brilliant engineers. It has resources to do a lot more than what it does. However, beyond a certain level, technology transfer becomes an issue. Let's hope that with the bullet train, the Indian Railways finally gets a template to grow, specialize and then export. It is a great organization with quite a bit of corruption. In the face of competition and excellence, and the determination of the present government, the corrupt would probably wilt away and allow the rest to lead.

I'm glad that it's happening between Ahmedabad and Mumbai first. The dense traffic between these cities means that we'd (I'm from Ahmedabad!) be better connected and satellite towns would develop more.

[prasadee]

It is a no brainer that it would be awesome to have a bullet train in the country. It would be awesome for me to own a Ferrari, but should I? It is not a matter of perception, but one that can be seen in black and white, if one is willing to look at facts and figures. (It does become grey if the facts/figures are disputed, which is very common these days )

There are many points made on this blog post here that I resonate with. Especially the comparison with the entire annual Healthcare and education spend for the country.
https://saafbaat.com/economy/bullet-train

[ksameer1234]

Originally Posted by prasadee

There are many points made on this blog post here that I resonate with. Especially the comparison with the entire annual Healthcare and education spend for the country.
https://saafbaat.com/economy/bullet-train

The blog in early paragraphs talks about how for a fare of Rs. 1500, bullet train will need lakhs of people to travel to make the project break even. It then ends mentioning that bullet train fare is very expensive in Japan and people in India can't afford it. Isn't this contradictory? Either the fare will be cheap (Rs.1,500 will be shatabdi fare in 2023) and project will not be financially viable or the fare will be high, project will recover cost but be out of reach of common people.

The annual budget comparison is truly apples and oranges comparison. Why compare annual budget for programs with that of an infrastructure project which will come up over 5 years. Might as well multiply all the annual budgets by five to get an idea of how the five year expenditure for various activities will be. For example, Railways is going to invest $137 billion over five years. That is almost 7 times the expenditure on bullet train.

[prasadee]

Originally Posted by ksameer1234

For example, Railways is going to invest $137 billion over five years. That is almost 7 times the expenditure on bullet train.

This data certainly moves my position on the issue from being black and white, into shades of grey. Thanks for sharing this.
An annual expense on time critical things like Education and sanitation is still crucial in the long run. It still seems extravagant considering how few people will benefit from such a project compared to the overall railway infrastructure touching all the cities. It does comfort me to see that larger investment is being made towards the overall railway infrastructure.

[maddy42]

There are many schemes in the country which are a total waste. For example one from the railways: 10,000 employees were being used as Household helps of officers, now ordered to get back to the duties of railway safety.

http://indiatoday.intoday.in/story/i...1/1053427.html

The entire railway network is going to be electrified as stated by the new minister to reduce dependence on diesel. Hopefully the focus will be on safety of the existing network, while we invest in new technology.

In other news china restarted its 350kmph train. Their network is currently over 20000 kms of highspeed rail.
https://learningenglish.voanews.com/...s/4016377.html

Maddy

[norhog]

There is no point being pessimistic here.
The Indian railways have been running on foreign tech for a very long time, it is not like we suddenly started relying on foreign help.
The locomotives are GE, Alstom or Siemens.
The EMU are Bombardier and Siemens.
Major part of suburban signaling in Mumbai area is by Siemens. The Rajdhani and Shatabdi coaches, LHB.
No one batted an eye lid when these collaborations took place. If we add these up it is run into more zeros at the end of the figure than the much talked about Shinkansen.
They were mostly on same principal of tech transfer and setting up of manufacturing facilities here.
And then what about the DFC. Major part again financed by JICA.
Next Delhi metro??
The list is quite big.
If we cared we would have developed all the above ourselves. This is no rocket science, just metal and steel technology.(please forgive the simplification but it is close).
So let's welcome this with open arms and stop this negativity thing here.

[hybridpetrol]

Originally Posted by ksameer1234

The blog in early paragraphs talks about how for a fare of Rs. 1500, bullet train will need lakhs of people to travel to make the project break even. It then ends mentioning that bullet train fare is very expensive in Japan and people in India can't afford it. Isn't this contradictory? Either the fare will be cheap (Rs.1,500 will be shatabdi fare in 2023) and project will not be financially viable or the fare will be high, project will recover cost but be out of reach of common people.

Yes, the one sided articles written all over the internet (possibly with a political motivation) usually present two stories to showcase themselves as being unbiased. Yet, they will emphasize their point. This is one such case.
So, first part of the story: If the fare is cheap, project is doomed due to lack of financial viability.
Second part of the story: If the fare is high, no one will be able to travel, and again the project is doomed.
So, they seem to say either case, bullet train for India is a non sense.

Metros are expensive (compared to passenger trains). AC Volvo buses running within the city are expensive (compared to regular red color buses).
If it is expensive and people will not opt for it, why do we even operate AC coaches in Indian Railways? If the financial viability for each project is so important (irrespective of indirect benefits with revenue collection & income taxes generated through the development of the area), then we would not attempt to do anything new in our country, as it is too expensive, or it is not financially viable for our country.

Ah, I wonder what is the real motivation behind such articles.