Renovation of India’s railway system must be guided by market needs, principles

By Wang Jiamei Source:Global Times Published: 2017/11/13 22:46:17

With work about to start on India's first bullet train project linking Mumbai and Ahmedabad, the country is set to take a great leap in rail infrastructure in the years to come.

India's Ministry of Railways plans to invest more than $150 billion in the sector over the next five years, which will help create 1 million jobs, the Press Trust of India reported on October 29, citing Rail Minister Piyush Goyal. It is not clear whether the $150 billion includes any funding from Goyal's predecessor's estimated investment of 8.5 trillion rupees ($129.9 billion) from 2015 to 2020.

India's railway sector is in urgent need of upgrades, and companies from Japan, China and Germany have shown strong interest in railway projects there. The country's colonial-era rail network, totaling more than 60,000 kilometers in length, is one of the world's largest railway networks. But there have been an increasing number of derailments in recent years, and the aging system can no longer meet the needs of India's economic development.

However, great ambitions alone are not enough for India's rail upgrades, which should be carried out based on actual market need and market rules.

Just take the Mumbai-Ahmedabad project as an example. The viability of the Japanese bullet train project has long been a topic of debate in India. More than 40 percent of the seats on all existing trains on this route were empty in the third quarter of this year, Business Today reported on November 2.

Other media reports have noted that the fare of the bullet train is expected to be about 3,000 rupees, equivalent to the cost of an air ticket for the same route. These figures raise concerns over the financial viability of the project.

Despite India's urgent need to upgrade its railways, mindless development of the rail network is not in the best interests of the Indian people. While the Belt and Road (B&R) initiative aims to improve infrastructure in the countries and regions along the B&R route, it should be noted that these projects proceed based on the development needs and capabilities of the host countries.

This is not to say that India should give rail projects to China, but that it should follow laws of economics and follow plans that yield the maximum benefit. With China's railway technology rising to the ranks of global leadership after years of large-scale domestic construction, the industry stands ready to compete for overseas projects with global rivals. It is to be hoped that India will not hold too much distrust against Chinese companies when arranging rail projects, as that wouldn't serve its own interests.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn

Posted in: EYE ON THE ECONOMY

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