The first high-speed rail corridor is likely to be funded through soft loans from key international funding agencies such as Japan International Cooperation Agency (JICA) and World Bank. The government prefers soft loans to private funding under the public-private partnership model due to high-risk and uncertainty over profits involved in the project, which might deter private players from participating.
According to senior Railway officials, these funding agencies have also expressed interest to finance the first high-speed rail corridor. The 534-km long Mumbai-Ahmedabad stretch is likely to be the first high-speed rail corridor and is expected to have trains running at speed of up to 350 km per hour. JICA is undertaking a feasibility study of the corridor project.
Senior Railway officials involved with the project said the government thinks that it was not feasible to explore PPP for the first high-speed rail project. “We do not think that private parties will be interested. This is the first project with high risks and first of its kind in the country. The first project has to be done by the government. Once it is successful, private players will be interested for the other projects,” said a senior Railway official on condition of anonymity. The estimated project cost is about Rs 54,000 crore with per km cost of Rs 100 crore.