India And Japan Agree On A Fourth Financing Tranche For A Bullet Train Project.

To enable the fourth loan tranche for the Mumbai-Ahmedabad bullet train project, which is being financially supported through overseas development assistance by the Japan International Cooperation Agency, India and Japan have inked an agreement (JICA). 

One of the outcomes of the bilateral meeting between Prime Minister Narendra Modi and Japanese PM, Fumio Kishida, who is on a two-day bilateral visit to India to discuss economic cooperation, the upcoming Quad Summit, and the Indo-Pacific, was noted by the Ministry of External Affairs as the “Exchange of Notes of Tranche IV JICA ODA Loan of JPY 300 billion for Mumbai-Ahmedabad High-Speed Rail.

 The fourth tranche of the loan agreement between India and Japan was linked during this visit, according to Foreign Secretary Vinay Kwatra. He went on to say that the leaders also discussed the project’s implementation progress. According to a loan agreement signed between JICA and the Indian government in July 2022, the third tranche of financing for the construction of the Mumbai-Ahmedabad high-speed railway would be 100,000 million Japanese yen, or around Rs 6,000 crore. 

JICA committed a credit package worth over Rs 18,000 crore in 2017. By 2026, India’s part of the corridor’s infrastructure projects should be finished, according to the National High-Speed Rail Company (NHSRCL). The project would cost a total of Rs. 1.08 trillion.

By the end of October 2022, the Center had acquired 95.45 percent of the land in Maharashtra and 98.87 percent of the land in Gujarat. Notwithstanding development at Mumbai’s Bandra Kurla Complex, the corridor’s terminal station, another land piece in the state remains in limbo. Godrej & Boyce Manufacturing and NHSRCL are still at war over compensation for a 10-acre plot of land.

The two countries commitment to collaborate on the Japanese language was also renewed. Kishida invited PM Modi to the G7 leaders’ summit, which will be held in Hiroshima in May. They also talked about India’s goals for hosting the G20 this year.

Earlier in the day, Kishida gave the 41st Sapru House Lecture, which was organized by the Indian Council of International Affairs. He said that Japan will improve Indo-Pacific connectivity, encourage the area to cherish freedom and the rule of law free from coercion and make it rich.

Kishida stressed that his administration was dedicated to upholding former Prime Minister Shinzo Abe’s proposal for a free and open Indo-Pacific and said that Japan would step up diplomatic efforts in the area by expanding its Overseas Development Assistance program. According to him, Japan would mobilize more than $75 billion in public and private funding for the infrastructure inside the Indo-Pacific vicinity through 2030 thru yen loans, non-public investments, and different means.

According to Kishida, the Japanese government will create a new grant-aid system that will be “a form of private capital mobilization” and will attract investors. This new menu is designed to help young entrepreneurs in each country begin their firms. In “this new initiative to establish synergy effects between public and private investment,” Japan will collaborate with regional partners that support this strategy, he said. 

Meanwhile, the Japanese parliament is exploring amendments to the regulations governing the Japan Bank for International Cooperation (JBIC), which will make foreign businesses that assist the supply chains of Japanese corporations eligible for JBIC loans. According to Kishida, it would encourage private enterprises to develop in growing industries like digital and decarburization while preserving economic stability by making it permissible to invest in start-ups with international operations.

The Indo-Pacific region benefits from the India-Japan alliance because it upholds common democratic ideals and respect for the rule of law, according to Prime Minister Modi, who spoke on Monday following extensive discussions with Kishida.   The two prime ministers mainly concentrated on fostering collaboration in fields such as clean energy, semiconductors, and joint development of military hardware, in addition to looking into solutions for regional security issues in light of China’s growing aggressiveness. 

The two-year budget for the bullet train project is 32,592 crore.

“Last year, we established a goal of attracting $5.2 trillion in Japanese funding into India over the following 5 years. It is a source of satisfaction that there has been considerable progress made in this area, Modi said, adding that “rapid” advancement has been achieved on the high-speed rail project between Mumbai and Ahmedabad.  

In Gujarat, all civil contract packages have been granted, and tunnel and bridge construction is well underway. Two of the three Maharashtra civil contract packages are being evaluated, and a third will be put out to bid by April 2023, according to the Minister.

Gujarat and Maharashtra both made physical improvements of 32.93% and 13.72%, respectively, through February. For the bullet train to operate successfully in Maharashtra, there are almost eight tunnels and 36 bridges that need to be erected.

Delay due to political considerations

Political factors had caused a delay in the work on the Maharashtra side, and the NHSRCL has now given a joint venture between Megha Engineering and Infrastructure and Hindustan Construction Company the first contract in the state for work related to the design and construction of an underground Mumbai high-speed rail The project will take 54 months to complete and will span a total area of 4.85 hectares, the contract would cost close to 3,681 crores.

Six platforms, each measuring 415 meters in length, will be present at the station to handle a 16-coach bullet train. The platform is intended to be 24 meters or so below ground level. One tunnel and 140 bridges need to be completed in Gujarat, of which nine have already been constructed. The complete project work has been divided into 28 contract packages, of which 19 have been granted and three are still being evaluated.

The Notice Inviting Tender (NIT) for three packages has been issued, but the NIT for the remaining three packages has yet to be released. Mr. Vaishnaw stated that the projected date for project completion could only be determined if the land acquisition was completed and other deadlines linked to contract fulfillment will be finalized.

Edited by Prakriti Arora