India's first bullet train project cost likely to touch Rs 2 lakh crore by the time of completion

New Delhi, India (Urban Transport News): With the increased cost of cement, steel and land besides GST, the 508 km long Mumba-Ahmedabad high speed rail project is slated to hover around Rs 1.67 lakh crore and likely to touch Rs 2 lakh crore by the time of completion.

The ambitious project moved at a snail’s pace due to the maximum delay in land acquisition as the physical progress is only about 20 per cent till May 2022, according to the Railways Ministry data.

The overall project cost overrun of the project has now touched Rs 1.67 lakh crore due to delayed by more than five years and postponement of deadline many times. The higher land acquisition price, increased input cost, the fluctuating Yen and GST are also major factors for the cost overrun of the project.

The Mumbai-Ahmedabad High Speed Rail Project was initially planned for completion by 2023, the project has witnessed multiple extensions since then. If the pace of execution is any indication, the timeline for completion of the bullet train project is likely to go beyond 2028.

The project suffered delays under the Uddhav Thackeray-led Maha Vikas Aghadi government, which had labelled the project as “vanity”. The lack of political will meant that land acquisition for the project was delayed in Maharshtra. However, protest of farmers and legal battles were also increased the cost and delayed the project in Gujarat state.

With the return of the BJP-supported government in Maharashtra, it has been expected that the new government will now shift their focus to complete the land acquisition as soon as possible. As per the reports, only 150 hectares out of the required 298 hectares had been acquired in Maharashtra until this April.

After taking office in June, the new government expedited the land acquisition process in Maharashtra an cleared the project in the state.

The Mumbai-Ahmedabad High Speed Rail project was sanctioned in December 2015 at an estimated cost of Rs 108,000 crore with 80 per cent Japanese funding as an ODA loan.

The expenditure by National High Speed Rail Corporation Ltd (NHSRCL), the implementing agency of the project, is Rs 28,442 crore as of June-end this year, which is about 25 per cent of the original cost.

According to the Railways, the cost of cement, steel and land acquisition have gone up many times since 2015 when the project got sanctioned.

Since the JICA loan is in Japanese currency Yen, the fluctuation in global price has also affected the cost. Besides, the implementing agency has to incur the cost of about Rs 20,000 crore due to the GST.

NHSRCL maintains that the revised cost can be determined only after the award of all the contracts and completion of land acquisition. The project involves three states including Maharashtra, Gujarat and Dadra and Nagar Haveli.

As per the latest progress report, NHSRCL has awarded all contracts for Civil, Bridges and Track for construction of viaduct, bridges, stations and track for the entire alignment of 352 km in Gujarat and Dadra and Nagar Haveli.

NHSRCL has recently floated tender for the construction of only underground Bullet Train Station Bandra-Kurla Complex (BKC) and cut and cover tunnel in Maharashtra. The first trial is expected to be held between the 49 km long Bilimora-Surat section in Gujarat in 2026-27.