Thursday, December 17, 2015

India must not repeat Australia's mistakes

In the week since Indian Prime Minister Narendra Modi and his Japanese counterpart, Shinzo Abe, signed a $16 billion deal to bring bullet train technology to the sub-continent, the subject has been massively debated in both social and mainstream media.

A substantial proportion of comments have been against the idea, many seeing it as simply feeding Modi’s ego, pointing out that the high speed line will link the country’s largest city, Mumbai, with Ahmedabad in Gujarat, where the Prime Minister has his power base.

Others claim the money would be better spent upgrading India’s current rail stock, some of it hardly updated since the days of the British Raj, while riding on the bullet train will be so expensive only the rich would be able to afford it.

The rhetoric obscures what is, in fact, a very good deal for India. Japan will lend most of the money for the project at just 0.1 per cent interest to be paid over half a century – and nothing to be paid for 15 years, by which time revenues from the line should be rolling in.

That still makes it a very costly project, but there are times when economic viability and quick profits should be considered alongside other elements, such as the boost to national confidence and pride.

I was a reporter in Australia in the 1990s when the newly-elected Government of Prime Minister John Howard considered a very fast train network to link the major cities of the nation’s east coast. Plans were developed, tenders opened and Speedrail, a consortium advocating the French TGV, chosen.

However, the dry economists got into Howard’s ear and convinced him that it would never work – too little population, too many subsidies, profits decades away if at all. Howard had talked of high speed rail as part of a nation-building project, but opponents saw it only in terms of hard cash.

So today Australia still has no fast trains and its railway system is a joke. Instead, billions of dollars are spent on continual improvements to vast highways for tens of thousands of huge freighters and millions of smaller vehicles, pouring pollution into the atmosphere as they go.

Fortunately Modi is unlikely to be so easily deterred. Millions of Indians depend on the rail network to get around the country and bullet trains, travelling at around 300km/h will cut travelling time considerably.

The Prime Minister, who is already negotiating with the Chinese to build another line linking New Delhi and Chennai, sees high speed rail as the cornerstone of the country’s transport system deep into this century.

“This enterprise will launch a revolution in Indian railways and speed up India’s journey into the future. It will become an engine of economic transformation in India,” Modi says.

Such a shame that John Howard did not feel gripped with the same inspiration and enthusiasm all those years ago.     

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