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The Chinese model for rail development

Even while Prime Minister Narendra Modi was making a strong pitch for his Digital India mission at the Silicon Valley, the Chinese were busy winning a lucrative contract for a high speed railway project in the US.

Days ahead of president Xi Jinping’s state visit to Washington DC, a consortium led by state-owned China Railway Group and the US Company, XpressWest, signed a contract to set up a joint venture to build a 370 km high speed line linking Las Vegas and Los Angeles.  The project is estimated to cost $12.7 billion and will be constructed over the next three years. Construction is scheduled to begin in September 2016. XpressWest said the high speed trains will cover the distance in just 80 minutes.

XpressWest, is a Las Vegas-based Hotel and Casino private developer should be well aware of the potential: Las Vegas attracted 41 million in 2014 with over 10 million coming from Southern California. By road it takes over four hours and in summer when visitors flock in droves, driving through the desert is indeed not very pleasant. With most visitors to Las Vegas visiting casinos and the myriad entertainment centres and with the ease to hire automobiles, this high speed train can prove to be quite popular.

Such a plan is also on track to connect Los Angeles with San Francisco. California has been in the forefront of the 50 American states to experiment such high technology  large projects.

The success of these two projects would form important water sheds in the United States shifting its obsession from the automobiles to the more economical and efficient rail roads.

IE has been pointing to the great strides made by China in railway development. Over the last two decades, China has been constructing thousands of kilometres of high quality rail tracks, capable of tackling speeds of 300 kmph to 400 kmph. China that lagged behind India in total rail lines in 1947, will soon have more than double India’s route kilometres of around 65,000.

In India, average speed of even prestigious trains on trunk routes like the Shatabdi Express from Chennai to Delhi is around 77 kmph. The tracks laid decades ago are not capable of taking trains with speeds in excess of 160 kmph.  

The NDA-2 government announced a plan to construct a railway quadrilateral on the lines of the highway golden quadrilateral. Such a project could connect the four metros of Delhi-Mumbai-Chennai-Kolkata as also major ports. This can bring about spectacular changes in economic development of towns and villages en route. Running trains at speeds of 300 kmph, Delhi can be reached from Chennai overnight, Bengaluru and Vijayawada in just an hour!  This project could provide massive custom for steel, cement and other construction materials, signalling other communication equipment, opportunities for massive electrification and above all, huge employment.

India has important lessons in this. An efficient railway system can help reverse the country’s focus on road transport, which has weaned traffic from railways continuously over six decades. Narendra Modi and Suresh Prabhu will do well to look at the prospects of involving the private sector in a big way for railway development. Like how the UPA left the development of Aadhaar scheme to Nandan Nilekani, it would do well to invite a business leader of proven merit like R Seshasayee or Deepak Parekh to work on rapid railway development.

Funding should not be a problem. The relaxation of rules permitting 100 per cent FDI for railway development and involvement of the private sector in managing railway stations and even use of the permanent way would help. Japan, Korea and China, apart from the leading countries in Europe and US, can be invited to invest and bring state-of-the-art technology. Like the highway development programme sustained on the cess on diesel and petrol, railway development can be built on a similar cess  on freight and non-suburban passenger tickets.

A beginning made now can help the NDA-2  show spectacular results before the end of its current term. It will vastly help deliver on sabka vikas, sabke saath.

Like what China did in less than two decades, India can develop expertise on railway development in quick time that could be in great demand across the globe- both from developing and developed countries.


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IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
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