India's railway project with Japan faces $4.5 bil. budget shortfall

10, Feb. 2020

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TOKYO, Kyodo - Japan plans to discuss how to proceed with a high-speed railway project in India employing Japan's shinkansen technology after its estimate found a budget shortfall of some 500 billion yen ($4.56 billion), a source close to the matter said Saturday.

The cost for the project connecting around 500 kilometers between Mumbai and Ahmedabad rose from the previous budget of 980 billion rupees ($14.68 billion) after India called for building a reinforced elevated bridge and using shield machines for excavations, the source said.

The shortage is the latest setback for the iconic project in Japan-India partnership after the commercial operation was pushed back by five years from originally scheduled 2023 following a site acquisition delay.

Japanese Prime Minister Shinzo Abe and his Indian counterpart Narendra Modi plan to discuss the matter at a summit.

The two leaders agreed in December 2015 on the introduction of the bullet train technology to India, which would be the country's first high-speed railway project.

Under the agreement, Japan pledged to provide loans of up to about 1.46 trillion yen for the railway construction led by Indian companies.

Japan International Consultants for Transportations Co., a subsidiary of East Japan Railway Co., has taken part in the project to help provide trains, while the parent company looks to offer maintenance and driver training services.

Abe had to postpone a three-day trip to India in December after a curfew was imposed in Guwahati in the state of Assam following the violent protests over legislation that gives citizenship to non-Muslim immigrants from Afghanistan, Bangladesh and Pakistan. The Japanese premier was slated to meet Modi there and take up the railway cost issue. (Kyodo)