India’s bullet-train project moves into its final construction phase

what happened

Construction of India’s first high-speed railway is moving into its final phase. On the Gujarat section of the 508-km Mumbai-Ahmedabad corridor, commercial service is planned in stages, beginning with the Surat-Bilimora route. A more than 100-km Surat-Vapi section is expected to be ready by December, followed by testing of Indian trainsets next year. The project is designed for speeds of up to 320 km/h, while the first BEML trains will have eight coaches and a maximum test/design speed of 280 km/h, initially operating at around 250 km/h.

The project was originally structured as India-Japan cooperation based on Shinkansen technology. A memorandum signed on 12 December 2015 provided for Japanese loans covering up to about 81% of the cost at 0.1% a year over 50 years, with a 15-year grace period. The approved cost rose from Rs.97,500 crore to about Rs.1.08 trillion by September 2017; almost all of the promised loan has been sanctioned and nearly 70% disbursed. After Japan said E5 production was being phased out in favour of E-10, which is not expected to be ready before 2030, India opted for a mixed technology model combining a European signalling system with domestically built coaches. Japanese experts remain involved in design, training and construction oversight.

why it matters

The project is becoming a test of India’s ability to absorb high-speed rail technology, not just build a line. Markets will focus on the scale of spending, Japanese financing, domestic train production and the implications of delays for cooperation with Japan.

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