For decades, the passenger trains in India have been running at an average speed of 50-60 km per hour (kmph) with a few exceptions. Following JICA’s assurance to fund the High Speed Rail (HSR) project, India will have trains which can travel at an average speed of about 240 kmph (with a maximum speed of 320 kmph), covering 500 km in about two hours.

Compared with road projects, rail projects, especially Metro or HSR, are notorious for huge investments and trickle-through return on investment over a long period of time. In the current scenario, there are no financial institutions in India that could provide such massive funding to be repaid over a long time, preferably with a moratorium till the project ridership ramps up. This is why the deal signed between India and Japan for the development of a HSR system is path-breaking.

The terms of the loan provided by JICA will make the first HSR project financially viable. By taking all the costs and prices at 2015 price level, it was estimated that the construction cost would be about Rs.98,000 crore.

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