Wednesday, March 20, 2019

Why Bullet Train in India Will Leapfrog Growth Economically!

Whenever something important has to be done in the country in the name of progress there are enough cynical critics who come out and start questioning it.  Either such people share suspect data or they share fuzzy nonsensical theories (if they have an economic degree from a reputed place).  And, somewhere at the back of this all is the most damning socialist retort – “this money could be used for education”.  One saying this last argument should be asked to roam in rags and give up their phones and houses and start donating to the homeless in their city.  Or they should remain naked and just eat – for replacing one unrelated activity (clothing or travel) with another (eating or poverty) seems to be their favorite way to be?

Why #BulletTrain in India Will LeapFrog Growth Economically! #BulletTrain4Growth Click To Tweet

This brings me to the issue that is plaguing the media these days – the Bullet Train!

The Indian Prime Minister Narendra Modi and Japanese PM Shinzo Abe innaugurated the Bullet Train project on September 14, 2017.

Asinine Criticism and the Appropriate Precedence for Bullet Trains

Many have criticized this projects – talking about how bad the railways generally are or how poor India is or how expensive this whole project is.  But the worst – and racist – rant came from a German newspaper with the headline “Japan’s bullet train to speed up India’s shabby railways” and an introduction which said:

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Deadly accidents, dirty stations and coaches, decrepit equipment and unpunctual trains mark India’s vast, outdated and inefficient rail infrastructure. Will Japanese bullet trains make a difference?

Yes, it is true that there are accidents and it is also true that there are old coaches and dirty stations etc.  But work is being done on all levels.  Given the size of the country – a reality check for the Germans: Germany is 9 times smaller than India in size and almost a billion people less! – things do take time.  Sometimes it is important to place the most aspirational against the one that needs improvement!  That is what visions and leadership is all about.  Isn’t that how the Metro trains were brought in and integrated in so many major Indian cities?!

Are Metro trains breaking down?  Are Metro trains dirty or bad?  Are they late?  Or are they backward in any way?  The answer to anyone who has used the large Delhi Metro train system is a resounding NO!

Just some facts on Delhi Metro while we are on this dinging of Indian Railways in general – which is a convenient way to bring every work down in India.  In a survey done by Global Metro Benchmarking Groups NOVA and CoMET for 18 metro internation systems, Delhi was rated second best globally along with London and Bangkok!

Just hop over to the normal Old Delhi railway station and go on the train there and one would have thought that Metro should have never been built in Delhi!   See how asinine such critique can be based on “past situation”?!

Besides, the current Railway Ministry – under Suresh Prabhu for most part – has done a lot in improving the safety of the Railways in General.  Here is a list of some of their steps:

  • Capital expenditure on safety related activities increased from Rs.39,200 Cr in 2013-14 to Rs. 46,048 Cr in 2015-16. We will be further increasing it to Rs.53,727 Cr in 2016-17.
  • Pace of track renewal has been increased substantially to over 2000 km every year.
  • Working on a mission to eliminate all unmanned level crossings by 2019.
  • All coaches to be retrofitted and improved with anti climbing and anti telescopic features over the next 4-5 years.
  • Entered into partnerships with several best-in-class global research bodies like Railway Technical Research Institute, Japan and Korean Rail Research Institute.
  • Introduction of Ultrasonic Broken Rail Detection System to detect rail fractures on a real time basis.
  • Train collision avoidance system is being introduced along high density routes.

So its not as if the work on Bullet Train is happening in a vacuum!

Strategy to Improve Bullet Train Reliability and Safety

Just as Elevated + Tunnel Tracks have helped eliminate a lot of security/safety and reliability issues for the Metros, the Bullet Train will also use that strategy.

Of the 508 km track – 468 km (92%) will be elevated track, 27 km (6%) will be inside tunnel and only 13 km (2%) on the ground!  That surely helps to use a “Best Practice” from the Metro experience and use it to improve the reliability, safety and the longevity of the Bullet Train system!

In fact, the train will pass through one of the longest – 21 km tunnel – of which 7 km is under the sea.

So far from being plagued by the stereotyped issues being ranted by these racist critics

Now, let us look at the cost aspect.

Let’s do Cost Comparison for Bullet Train Will we?

The Mumbai-Ahmedabad High Speed Rail Project (MAHSR) will cost Rs 1,10,000 crores ($19 bn), out of which 81% or Rs. 88,000 crore will be given as loan by Japan at an interest rate of 0.1% over 50 years!

The train will cover 12 stations – including Mumbai, Thane, Virar, Boisar, Vapi, Bilimora, Surat, Bharuch, Vadodara, Anand, Ahmedabad and Sabarmati.  These are some of the biggest cities with even greater growth potential!  Stopping at all these would mean a journey just of under 3 hours (2 hrs 58 mins) from Ahmedabad to Mumbai!

The train would run 70 sorties in a day and the fare would range between Rs 3,000 to Rs 5,000!  And it will carry 750 passengers in one go.  Do the simple math – and it comes to roughly Rs 21 crores in ONE day!  It would take roughly 15 years to recover the money for the cost of the project!  And, the over 80% of the cost has to be paid back in 50 years to Japan!  So get the point?!

 

 

Now, to have the ‘Opportunity Cost’ comparison, it would be important to compare it to what would it cost to have this covered by an airplane – right?!  Here is a relevant and informative answer by a pilot which will give insight into this.

Looking at some data from the US, where the stage length (or average flight distance) is about 1 000 km, efficient carriers are flying 10 to 12 hours out of a 24 hour day at 80% – 85% load factors. [2] I believe the low cost carriers target a 30 minute turn time on the ground for a single aisle like an A320 or a B737 and an hour or more for larger aircraft during busy times [3].  Those are difficult to achieve.  Also, people don’t like to travel in the wee hours of the morning so flights that depart at 03.00 are not very full.

So one way of answering this question is to say that typical airliners are flying 10-12 hours per day with 30 – 60 minute turn times on the ground — now apply those parameters to your route.

If an airplane were, hypothetically, to run turns between London and Paris, at 75 minutes flying time with say, 45 minutes turn on the ground at each airport, and we applied the same types of utilization rates to those flights, theoretically speaking, it would conduct 9 such flights in a day, totaling 11.25 hours of flying time over an 18 hour period, presumably from 6 am to midnight.

So that means for doing 70 journeys, we would typically need almost 8 Boeing 737s!  Cost of 8 737s is a cool Rs 3500 crores!  Of course, no 0.1% loan and more expenditure in airports and other things, specially if we have to stop at 12 cities to make it happen!

With 12 cities, the cost of air travel in that time frame at that rate in a day will be exorbitantly expensive!

Impact of Bullet Trains to the Economies

The impact of a Bullet train coming in and integrating smaller cities with the larger ones has been studied and results are amazing!

Chinese Experience

In China for example, Tianjin, Nanjing, and Shaoguan are smaller cities located between 100 and 750 km from China’s megacities of Beijing, Shanghai, and Guangzhou.  With the coming of Bullet Train, not only have companies moved their offices out of the megacities but also some of the professionals have moved to cheaper locations for housing!

The introduction of the