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Thursday, October 22, 2015, 15:42

Japan offers India soft loan for $15b bullet train

By Reuters

Japan offers India soft loan for $15b bullet train
The new Hokuriku "shinkansen" (left), or bullet train, bound for Tokyo heads out of Kanazawa station in Ishikawa prefecture as a new service is launched on March 14, 2015. (JAPAN OUT AFP PHOTO / JIJI PRESS)

NEW DELHI - Japan has offered to finance India's first bullet train, estimated to cost $15 billion, at an interest rate of less than 1 percent, officials said.

Tokyo was picked to assess the feasibility of building the 505-kilometer corridor linking Mumbai with Ahmedabad, the commercial capital of Prime Minister Narendra Modi's home state, and concluded it would be technically and financially viable.

The project to build and supply the route will be put out to tender, but offering finance makes Japan the clear frontrunner.

Last month China won the contract to assess the feasibility of a high-speed train between Delhi and Mumbai, a 1,200-km route estimated to cost twice as much. No loan has yet been offered.

"There are several (players) offering the high-speed technology. But technology and funding together, we only have one offer. That is the Japanese," said A. K. Mital, the chairman of the Indian Railway Board, which manages the network.

The two projects are part of a 'Diamond Qaudrilateral' of high speed trains over 10,000 km of track that India wants to set up connecting Delhi, Mumbai, Chennai and Kolkata.

Japan has offered to meet 80 percent of the Mumbai-Ahmedabad project cost, on condition that India buys 30 percent of equipment including the coaches and locomotives from Japanese firms, officials said.

Japan's International Cooperation Agency, which led the feasibility survey, said the journey time between Mumbai and Ahmedabad would be cut to two hours from seven. The route will require 11 new tunnels including one undersea near Mumbai.

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