Japan nears $1.7bn India high-speed rail contract
TOKYO, December 9, 2015
Japan is likely to win a multibillion-dollar contract to build India's first high-speed railway, a 500-km link between Mumbai and Ahmedabad, said a report citing people familiar with the matter.
A deal, valued at about Rs980 billion ($14.7 billion), could be reached this weekend when Japanese Prime Minister Shinzo Abe travels to India to meet Prime Minister Narendra Modi, reported the Wall Street Journal.
Modi and Abe are known to have a good rapport. The Japanese premier has sought opportunities to meet Modi at international gatherings, pressing him to consider the Japanese rail technology for the Mumbai-Ahmedabad corridor, stated the report.
Abe has touted infrastructure exports as a pillar of his economic-growth strategy and important to cementing Tokyo's ties with Asian security and economic partners.
A deal in India would follow the loss of two recent high-speed rail contracts to China that had alarmed officials in Tokyo, heightening concerns that China is eclipsing Japan as the main economic partner for key countries in Southeast Asia.
In September, Japan suffered a high-profile defeat to Beijing in a competition to build a high-speed railway in Indonesia. China's generous financing terms were widely believed to have tipped the balance in its favor. Last year, Japan also lost to Beijing in a bid to build a railway in Thailand.
The high-speed corridor between Mumbai and Ahmedabad is seen as a pet project of Modi, who is trying to modernise the Indian economy. Under the Japanese proposal, construction is expected to begin in 2017 and be completed in 2023.
Japan has offered attractive financing to win over Indian leaders. This includes loans covering 81 per cent of the project's total cost, Indian Minister of State for Railways Manoj Sinha said in a written statement to Parliament dated December 2.
If India chooses the Japanese technology, a bid would be tendered by a consortium of Japanese companies, including East Japan Railway Co., Hitachi Ltd. andKawasaki Heavy Industries Ltd., a consortium official said.
