In the past few years, the development of high speed rail (HSR) projects has been a key focus area of Indian Railways (IR). IR is planning to develop HSR corridors along the Diamond Quadrilateral connecting the four metropolitan cities of Delhi, Mumbai, Kolkata and Chennai, and its two diagonals. Proposed to allow a speed of up to 350 km per hour, the HSR corridors are expected to facilitate faster travel. The Ministry of Railways (MoR) has constituted a special purpose vehicle (SPV), High Speed Rail Corporation of India Limited (HSRC), as a subsidiary of Rail Vikas Nigam Limited, for developing HSR corridors in the country.
Several HSR corridors – Delhi-Chandigarh-Amritsar (458.49 km), Delhi-Mumbai (1,318 km), Mumbai-Chennai (1,368 km), Delhi-Kolkata (1,474 km), Mumbai-Nagpur (798.5 km) and Mumbai-Ahmedabad (506 km) – have been planned for development. The government has already sanctioned the Mumbai-Ahmedabad corridor project for execution. The project will be developed by National High Speed Rail Corporation Limited (NHSRCL). The feasibility study for the project was conducted jointly by the Japan International Cooperation Agency (JICA) and the MoR. Later, JICA signed agreements with Japan International Consultants for Transportation Company Limited, Oriental Consultants Global Company Limited and Nippon KOEI Company Limited to undertake a detailed design survey of the project. The foundation stone for the project was laid on September 14, 2017.
Features of the Mumbai-Ahmedabad HSR project
The 506 km Mumbai-Ahmedabad HSR project involves the development of 12 stations located at Mumbai, Thane, Virar, Boisar, Vapi, Bilimora, Surat, Bharuch, Vadodara, Anand, Ahmedabad and Sabarmati. Of these stations, only the Mumbai station will be underground, while the alignment of the other stations has been proposed on an elevated viaduct with perfect grade separation. The average distance between each of these stations has been kept at approximately 46 km. The project has an implementation period of seven years (2017-23). The average daily ridership of the corridor is projected to increase to 40,000 boarding passengers per day by 2023 and to 0.02 million by 2053. NHSRCL has proposed the levy of a fare 1.5 times higher than that of the 1A class at present.
Assessment of project structure
In order to make the HSR project commercially and financially viable, developing an appropriate project structure is essential. The development of the HSR corridors by IR or its fully owned SPV is expected to result in greater revenues as compared to a public-private partnership (PPP) project. Moreover, the private sector does not have the risk appetite or financial capability for executing such a large project. The cost of borrowing for a private developer will be high at about 12 per cent. To find a suitable structure, the project can be unbundled into several subcomponents making it attractive for private players. Key components of the project such as infrastructure, rolling stock and depots can be developed by the government. On the other hand, components like getting lease rights for property development and operations and maintenance could be undertaken on a PPP basis. Besides, risk is not fully transferable in the case of a PPP project. Thus, IR may end up bearing a very high level of risk.
Major challenges and measures to mitigate them
For timely implementation of HSR projects, measures have to be undertaken to address major challenges affecting their execution. For instance, there is need to develop a common technical standard for various components of high speed operation as it becomes difficult to select the best technology from the innovative choices available worldwide. Another critical issue is the acquisition of land for stringent alignment requirements. Designs should be developed in such a way as to minimise the footprint. As HSR projects are highly capital-intensive, loans from multilateral and bilateral agencies are required to finance the project. In such a scenario, direct or indirect government support is crucial to get access to cheaper loans. Further, there is a need to encourage private participation in HSR development. Other key issues affecting timely implementation of HSR projects include long gestation periods, selection of appropriate track laying technology (slab track or ballasted track) and dearth of skilled human resources, construction contracting agencies and consultants.
Based on a presentation by M.P Singh, Chief Executive Officer, HSRC, at a recent India Infrastructure conference