Prime Minister Narendra Modi’s pet project, the Mumbai-Ahmedabad high-speed train, can cost up to ₹90,000 crore, will give low internal returns and will have to be largely funded by Government, said experts at an Indo-French Rail seminar.

According to the findings of French railway operator SNCF, even if the project were to be implemented through public-private partnership (PPP), at least 50 per cent of the cost will have to be borne by the Government, said Philippe Lorand, Senior VP-Business Development-India, South Asia and South East Asia, International Development Team, SNCF.

The project will require major financial support from the Government and will operate at a low internal rate of return of 2.4 per cent over the life, he added.

India should consider both high-speed and semi-high-speed rail services, as the latter are much cheaper and can be put in place in three years, SNCF has pointed out.

The Mumbai-Ahmedabad high-speed train project is expected to cost between ₹70,000 crore and ₹90,000 crore, said Girish Pillai, advisor infrastructure, Railway Board, at the seminar.

He said the Railways can run trains at 160 kmph by upgrading its current network at a cost of ₹2-4 crore per km while a high-speed line is expected to cost about ₹150 crore per km. The time taken to travel between Mumbai and Ahmedabad will go down to four hours and 15 minutes against the current travel time of six-seven hours, Pillai added.

MS Mathur, Executive Director – PPP, Railway Board, said the annual capital expenditure of Indian Railways is about ₹30,000 crore, including the dedicated freight corridor, which will make it difficult to fund high-speed trains from current resources.

So, tying up the finances is extremely important – more so with the participation of municipal bodies and State Governments – which are expected to be the beneficiaries, he added.

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