Indian Railways is planning to use gross budgetary support to meet the estimated 83 percent cost overrun of the Mumbai to Ahmedabad Bullet Train Project. The cost of building India’s first bullet train project has increased from approximately Rs 1.08 lakh crore to approximately Rs 1.98 lakh crore ($21.5 billion), mainly due to the long delay in land acquisition. However, senior railway officials said that they are not considering taking additional loan from Japan International Cooperation Agency (JICA) or any other multilateral financial institution to reduce the cost increase.
Gross budgetary support will be used
A senior official said in the ET report that there will be no need for further external funding for the Mumbai-Ahmedabad High Speed Rail (MAHSR) corridor. Cost increased by 83 percent due to delay in purchasing land; Gross budgetary support will be used, there is no possibility of contacting JICA for loan. The Budget for FY27 has earmarked Rs 15,000 crore for the National High Speed Rail Corporation – less than GBS’s capex of Rs 15,500 crore this year. It is a Special Purpose Vehicle (SPV) which has been entrusted with the task of implementing bullet train projects in the country. This trend is expected to continue till the completion of the MAHSR corridor.
Plan to ask for funds from Railway Ministry
Railways is planning to ask for more funds from the Finance Ministry. JICA has given soft loan of Rs 59,396 crore for this project since 2017. This 508 kilometer railway project is being built with Japanese cooperation and funding. Foundation work has been completed in eight out of a dozen stations of the corridor. Last November, the Center had announced plans to operationalize the 100 km stretch of the bullet train project by 2027.
7 new bullet train corridors announced
Apart from MAHSR, the Center has also announced seven new bullet train corridors spanning about 4,000 km, which is expected to bring in an investment of about Rs 16 lakh crore. These proposed corridors announced in the budget for FY 2027 include Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi and Varanasi-Siliguri.