Mumbai-Ahmedabad bullet train proving an expensive dream for Railways: study

According to a study conducted by Indian Institute of Management Ahmedabad (IIM-A), the proposed bullet train between Mumbai and Ahmedabad will have to ferry 88,000-118,000 passengers per day, or undertake 100 trips daily, for the Railways to keep it financially viable. The paper jointly authored by faculty members G Raghuram, professor of the institute’s Public Systems Group, and Prashanth Udayakumar, states that if the Railways set the ticket price at Rs 1500 per person for 300-km drive, then fifteen years after the operation it will have to ferry between 88,000 and 110,000 passengers every day to ensure that it repays the loans with interest on time.

It must be noted that Japan has offered a concessional loan of Rs 97,636 crore to fund about 80 per cent of the project cost with a repayment period of 50 years beginning from the 16th year of operation at an interest rate of 0.1 per cent.

One of the authors G Raghuram asserted “Typically one train carries 800 passengers, so to carry 88,000 passengers daily, you will need to take a total of 100 trips, or 50 trips each way. So, we need three trains every hour in each direction,” he said.

The report titled, “Dedicated High Speed Railway (HSR) Networks in India: Issues in Development,” however pointed out “there are many positive benefits and externalities of the HSR which would be useful in India’s overall aspirational development.”