India’s 300km/h bullet train project was seen as a big win for Japan over China. But it’s stuck in the slow lane

Land acquisition for the US$15 billion project is moving at a snail’s pace

PUBLISHED : Wednesday, 17 October, 2018, 5:40am
UPDATED : Thursday, 18 October, 2018, 2:58am

India’s bullet train project is moving at the pace of a commuter train instead.

A year after the project was begun, only 0.9 hectare of land have been acquired out of the 1,400 hectares needed, according to the Indian government company leading the project. The US$15 billion project, the highlight of Prime Minister Narendra Modi’s drive to upgrade infrastructure, is facing resistance from farmers unhappy with the compensation for land taken away from them.

The planned 500km line linking the financial capital of Mumbai with the economic hub of Ahmedabad was meant to be a big leap from the trains of Indian Railways, Asia’s oldest network with more than 165 years of history. At the current rate of land acquisition, the 300km/h bullet train built with Japan’s “Shinkansen” technology risks missing its 2023 completion target.

“Land acquisition is a very common problem in India and many projects are delayed, there’s no question about that,” said Raghbendra Jha, an economics professor at the Australian National University. “I’ve seen many instances like this.”

The protests highlight the challenge Modi faces in establishing his flagship projects across railways, ports and airports to cement India’s position as the world’s fastest-growing economy. Projects worth 754 billion rupees (US$10.2 billion) were completed in the quarter ended September, less than half of the targeted 2 trillion rupees, according to the Centre for Monitoring Indian Economy.

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“The project is very high-level and highly visible, publicity-wise,” said Nilanjan Mukhopadhyay, a political analyst and author of a biography on Modi. “If people are beginning to protest, this is going to undermine Mr Modi’s image as someone who can implement things very seamlessly.”

Land acquisition is a very common problem in India and many projects are delayed, there’s no question about that
Economics professor Raghbendra Jha

For Japanese suppliers to the bullet train such as East Japan Railway Co, Hitachi Ltd, and Kawasaki Heavy Industries Ltd, the Indian project was a big victory over China’s CRRC Corp, Germany’s Siemens AG and Canada’s Bombardier Inc. After years of international marketing, India became a rare buyer for the Shinkansen.

A group of farmers affected by the project have petitioned the Gujarat High Court, which has sought the government’s stand on the plea on November 22, according to court documents. The farmers have also questioned the government’s power to acquire farmland for public-private partnership projects, documents show.

The courts had earlier refused to put the land acquisition process on hold.

The National High Speed Rail Corporation, which is building the Indian project, said there are no funding gaps despite the delay in land acquisition. The date of operation for the project will be in August 2022, said Dhananjay Kumar, a spokesman for the company, a year before its official completion target. The company is “committed to take care of the interests of the affected farmers,” he said.

Farmer protests have stalled projects in India in the past. A decade back, Tata Motors Ltd had to delay selling the world’s cheapest car, the Nano, after violent protests by farmers forced the owner of Jaguar Land Rover to abandon a factory in the state of West Bengal and instead choose a new site in western Gujarat. Land acquisition has also been an issue in the potential construction of an oil refinery with Saudi Aramco in Maharashtra.

India isn’t the only country where a planned bullet train has struggled to take off because of land acquisition problems.

A US$6 billion high-speed rail project connecting Jakarta and Bandung is entangled in Indonesia’s infamous red tape and difficulties in acquiring land for the project. While construction was meant to begin in August 2016, only 7.6 per cent of the work has been done on the 142km railway line at the end of August, according to the Jakarta Post.

For Shailesh Kumar, director for Asia at political risk consultancy Eurasia Group, land acquisition is “an eternal story” in India. “But I have a suspicion that once the bullet train is there, and users accept it, you’ll see massive expansion,” he said.