Japan’s bullet train gives 164-year-old India railway a jolt
NEW DELHI/TOKYO — Japan’s government and its rail companies lobbied the United States for years to sell its bullet-train technology and found little success. Finally, there is an international buyer: India.
The South Asian country will become the first to import the iconic ‘Shinkansen’ bullet-train technology after Japan’s near-neighbour Taiwan, and that will be a highlight of India’s infrastructure upgrade program. The Japanese government has also agreed to fund most of the US$17 billion (S$21 billion) needed for the project that will become part of Asia’s oldest railway network.
Yesterday, Prime Minister Narendra Modi and Japan’s Shinzo Abe formally kicked off a plan to build the 500km line — roughly the distance between Los Angeles and San Francisco. Financing by Japan also means business farmed out to companies such as Hitachi Limited and East Japan Railway Company. It is also an opportunity lost for China’s CRRC Corporation Limited and European manufacturers including Alstom SA.
For Japan, which is locked in a strategic rivalry with China for commercial contracts abroad, the Indian project marks a hard-fought victory as they compete against Siemens AG, Bombardier Incorporated, Alstom and, lately, CRRC in a global market projected by BCC Research to be worth about US$133 billion by 2019.
After building the world’s largest high-speed network since the start of the century, covering 80 per cent of its major cities, China has been raising its profile.
“The competition between China and Japan, especially in the Asean (Association of South-east Asian Nations) region, has been fairly intense, and in India, there will be more competition for other phases of the bullet train project,” said Mr Jaideep Ghosh, partner and head of transport at consultancy KPMG. “Japan has a longer history of operating the system without any fatalities. Politics and strategic considerations do play a part, but finally it is a commercial decision.”
India is not the only country in Asia that is offering potential in highspeed rail. China outbid Japan to win a US$5.5 billion project in Indonesia in 2015, while the two countries are poised for a face-off again over a proposed Singapore-Kuala Lumpur link scheduled for completion by 2026.
United States President Donald Trump campaigned for improving infrastructure during elections. In February, ahead of a meeting with Mr Abe, Mr Trump even talked about high-speed railway lines. Mr Trump told airline bosses that Japan and China “have fast trains all over the place. We don’t have one,” according to a transcript of a meeting he had with airline chiefs.
In 2010, Japan offered to build high-speed rail in California as part of a US$40 billion project after discussions with then-Governor Arnold Schwarzenegger.
In 2014, Mr Abe said his government may provide financing to support Central Japan Railway Company’s bid to provide maglev trains for a Washington-Baltimore line.
A bullet train on Indian soil is part of Mr Modi’s ambitious plan to modernise rail infrastructure after decades of underinvestment. He is pouring as much as 8.6 trillion rupees (S$181 billion) to upgrade the congested and ageing lines that daily carry the equivalent of Australia’s population. The network was started under British colonial rule 164 years ago.
He is also counting on the project to spur a manufacturing and employment boom. His government says it will create 20,000 construction jobs, apart from 4,000 direct and 20,000 indirect jobs for operations. Local companies such as Larsen & Toubro Limited, Gammon India Limited and GMR Infrastructure Limited are also looking to win some of the contracts.
Japan has pitched quality as the primary selling point to India — a network that boasts zero fatal accidents in its more than half-century of history. Japan’s relatively high initial costs can be offset by lower repair expenses over a lifespan of decades, Japanese officials have said.
“We will work closely with the Japanese government and JR East to actively respond to the introduction of the Shinkansen system to India,” Hitachi spokesman Tatsuya Moriki said, adding that chairman Hiroaki Nakanishi will attend the function in India.
India is reviewing prospects for at least six more potential bullet-train corridors, including one that would connect Mumbai to New Delhi, although no decision has been taken. India has said it is in talks with Japan and other countries for those projects. BLOOMBERG
A bullet train on Indian soil is part of Mr Modi’s ambitious plan to modernise rail infrastructure after decades of underinvestment.