Bullet train will need 100 trips daily to be financially viable: Study

[cloud_9]

So by this logic,the govt. should not build roads in villages as it cannot be tolled.

I can bet the at the price will never be 1500 rs for a ticket.Also external revenues like advertisements have not been considered

#LogicFail!

It isn't about building roads or not but about building single lane roads or 4 lane access controlled motorways to villages.

With $350 billion in reserves and diminishing exports you can't spend $15 billion on a single project.

wouldn't it be a lot cheaper just to widen the NH8 to 8 lanes and invest in self driving electric cars?

you could subsidize the cost of 10,000,000 Tesla 3. the economies of scale would drop the price to around $20,000 each. and subsidize half the cost.

10,000,000 Tesla 3 @$10,000 would cost the India government $100 billion dollars
widening the NH 8 between Mumbai and Ahmedabad highway assuming it's like $8 million per mile=$2.8 billion dollars and for the entire NH 8= $7 billion


all and all India could get a major boost in going all electric for the cost of $120 billion dollars

But the Indian's want HSR because the Chinese got one!

 

[Spectre]

True!
But a logic is, that the fare should be less than air economy class or else you will not be able to attract passengers from other sector. In case of Ahmadabad Mumbai Sector, this value works out in region of Rs. 1800-2200. Taking a mean value of Rs. 2000 and average number of travelers as 100,000....


.... the revenue value works out to Rs. 100,000*2000 = Rs. 200, 00,00,000 (or Two hundred Crore daily).
Now at this point of time, this value looks impossible to achieve. So how railways plan to achieve this break even value, remains to be seen.

I from the beginning had doubts to the viability, even when I was working for Japanese Embassy but setting that aside 2000 seems like a reasonable fare considering AC-1 fare is 2400 and AC-2 1300 last I remember. Cheapest no frill Flights are usually in the range of 2500-3000 on the counter.

Accounting for yearly hike @10% by the time project is completed I expect the fare to hit 3k atleast.

 

[Ryuzaki]

#LogicFail!

It isn't about building roads or not but about building single lane roads or 4 lane access controlled motorways to villages.

With $350 billion in reserves and diminishing exports you can't spend $15 billion on a single project.


But the Indian's want HSR because the Chinese got one!

Indian Railways is losing 30,000 crore(over $4 billion) on passenger services annually and is being cross subsidised by freight revenues.So IR should stop passenger services and only carry freight?

 

[rubyjackass]

I from the beginning had doubts to the viability, even when I was working for Japanese Embassy but setting that aside 2000 seems like a reasonable fare considering AC-1 fare is 2400 and AC-2 1300 last I remember. Cheapest no frill Flights are usually in the range of 2500-3000 on the counter.

Accounting for yearly hike @10% by the time project is completed I expect the fare to hit 3k atleast.

Check the fares now. The cheapest fares are lesser in Mumbai-Ahmedabad route. I got trolled by people for suspecting the viability(not even profitability) of the project. Now it is clear we will be in fact building a white elephant, just because someone is loaning us the money(The money anyway goes to the someone's companies). If there is going to be any two cities which will have a traffic worth 100 trips per day(at that cost), it is either Chennai-Bangalore or Bangalore-Hyderabad(assuming Mumbai Delhi route is too long for an experimental track). Even there, I doubt it will be profitable(Viable, may be). This project is clearly a gift from the PM to his home state.

Indian Railways is losing 30,000 crore(over $4 billion) on passenger services annually and is being cross subsidised by freight revenues.So IR should stop passenger services and only carry freight?

That is old news. When the government raised the fares, this has changed. Railways may still be bleeding on passenger services. But that is the sole purpose of railways - affordable travel. How many people can afford to spend so much money for travel between Mumbai and Ahmedabad.

 

[cloud_9]

Indian Railways is losing 30,000 crore(over $4 billion) on passenger services annually and is being cross subsidised by freight revenues.So IR should stop passenger services and only carry freight?

It has to stop subsidising the passenger services,it's just a matter of time before someone does a fuel de-regulation with train fares.

 

[Spectre]

Check the fares now. The cheapest fares are lesser in Mumbai-Ahmedabad route. I got trolled by people for suspecting the viability(not even profitability) of the project. Now it is clear we will be in fact building a white elephant, just because someone is loaning us the money(The money anyway goes to the someone's companies). If there is going to be any two cities which will have a traffic worth 100 trips per day(at that cost), it is either Chennai-Bangalore or Bangalore-Hyderabad(assuming Mumbai Delhi route is too long for an experimental track). Even there, I doubt it will be profitable(Viable, may be). This project is clearly a gift from the PM to his home state.

I agree. Large portion of loan has to paid from the govt treasuries. Project as a stand-alone project is not viable because of the difficulties in covering it's own capex but I think the project has enough traction to be generate enough revenue to cover opex.

 

[rubyjackass]

I agree. Large portion of loan has to paid from the govt treasuries. Project as a stand-alone project is not viable because of the difficulties in covering it's own capex but I think the project has enough traction to be generate enough revenue to cover opex.

Well, Capex is what determines viability in infra projects. Even airlines are extremely profitable if you count only opex. But we all know the state of airline industry within India or without. The total revenues of Indian Rail(all over the country) is less than 2,00,000 crore and with deep losses. We are supposed to cover the Capex of one single route(with may be 4-10 stops) worth 90,000cr?! Bad economics. If any two cities need/justify such a railway, those cities should have high-income labor/residents with huge exchange rate on a daily basis. Those cities are not Mumbai and Ahmedabad.

 

[anant_s]

I from the beginning had doubts to the viability,

In one report submitted to railway board while studying the now being implemented DFC, this point was raised. Two options were considered viz, if it is economical to move existing Freight traffic on super saturated routes (>120% track capacity) to a dedicated freight network or lay high speed dedicated passenger tracks.
It was found that while DFC would eventually cost India around Rs. 90,000 crore (both Eastern and Western combined with 2 new Locomotive factories) and break even in about 15 years, Passenger corridor would cost in excess of 125,000 Crore and probably never break even.
Very High speed networks are even more costly and then as discussed earlier it really is looking unlikely how railways is supposed to generate revenue to pay off loan cost while keeping fares in check.
In this context, while present government's idea of introducing HSR is welcome, the way they are moving looks a bit baffling (the bullet train introduction). I think it would be better to De-congest the existing tracks by moving freight to separate corridors and then introduce trains like TALGO which donot require any significant (almost nil) in existing network and incrementally increase speeds to 250 kmph.

 

[cloud_9]

DFC's (especially the Eastern one) will break even before previous estimates.Coal production target for 2020 is 1 billion tonne and the mineral ore industry is in upswing.

 

[Eminent Mainstream Media]

#LogicFail!

It isn't about building roads or not but about building single lane roads or 4 lane access controlled motorways to villages.

With $350 billion in reserves and diminishing exports you can't spend $15 billion on a single project.

Sir going by that logic- Bihar should not have had Railways at all- All Freight and passenger traffic from Bengal could've passed from Gaya-Mughalsarai section- as most Biharis rarely buy tickets in Bihar- some of them don't buy even outside Bihar and do all India tour without ticket- Railway in Bihar is free- including interstate express/mails etc- In some places in North Bihar you may even find goats, wood, husk, milk and bicycle/motor cycles being transported on trains- I have personally seen a Buffalo on a train in Mansi- But Railways is still investing massively- Just recently 6000 crore worth Bridges were inaugurated and construction for more similar bridges were announced- including more electrification, doubling etc-

 

[Abingdonboy]

I think it would be better to De-congest the existing tracks by moving freight to separate corridors and then introduce trains like TALGO which donot require any significant (almost nil) in existing network and incrementally increase speeds to 250 kmph.

This exactly. HSR can be explored in 10-15 years but not today, take the TALGO option (semi-HSR that will also reduce OPEX by at least 25% because of its efficency) and concentrate on the DFCs to de-congest the passenger lines whilst investing in upgrading existing infrastrcture (trains, stations, lines etc).

That said, JICA is offering very very favouable rates and a project of this scale will create MASSIVE employment opportunities and the GoI needs to be allocating more public expenditure and creating greater capacity.

Swings and roundabouts really and to be honest I don't see why HSR can't be pursued as well as DFC, semi-HSR and everything else I have outlined.

 

[ayesha.a]

In one report submitted to railway board while studying the now being implemented DFC, this point was raised. Two options were considered viz, if it is economical to move existing Freight traffic on super saturated routes (>120% track capacity) to a dedicated freight network or lay high speed dedicated passenger tracks.

It was found that while DFC would eventually cost India around Rs. 90,000 crore (both Eastern and Western combined with 2 new Locomotive factories) and break even in about 15 years, Passenger corridor would cost in excess of 125,000 Crore and probably never break even.

What about upgrading existing passenger tracks to HSR? Is that financially viable?

(When you said "lay high speed dedicated passenger tracks", did you mean new tracks, or upgrading the existing ones?)

 

[AugenBlick]

Rs 1500 for 300-km drive per person fifteen years after the operation, it will have to ferry between 88,000 and 110,000 passengers every day to ensure that it repays the loans with interest on time.

@Abingdonboy @PARIKRAMA
If JICA reports were saying a introductory fare of 1800* at the beginning ,2024 then 15 yrs from now i.e. 2030 why would the fare remain 1500??? What about rupee inflation and also considering that fares will not be subsidized.
Leaving all industrial benefits aside.
* that 1800 was in current rupee terms. not 2024 rupee

 

[cloud_9]

Sir going by that logic- Bihar should not have had Railways at all- All Freight and passenger traffic from Bengal could've passed from Gaya-Mughalsarai section- as most Biharis rarely buy tickets in Bihar- some of them don't buy even outside Bihar and do all India tour without ticket- Railway in Bihar is free- including interstate express/mails etc- In some places in North Bihar you may even find goats, wood, husk, milk and bicycle/motor cycles being transported on trains- I have personally seen a Buffalo on a train in Mansi- But Railways is still investing massively- Just recently 6000 crore worth Bridges were inaugurated and construction for more similar bridges were announced- including more electrification, doubling etc-

Is my English that incomprehensible?I haven't mentioned anything about frieght in my post.

Should Biharis have access to Railways? Yes!
Should Biharis have access to HSR? No!
Should people travelling without ticket have access to anything? No!


Bihar is getting the basics rail road infrastructure not a HSR worth $15 Billion.

 

[Sky lord]

Should Biharis have access to Railways? Yes!

Why? Why should Biharis have access to Railways when it is clearly unprofitable? They should pay for their tickets but they do not and they will not in the foreseeable future. So any kind of railway system in Bihar will not yield profits and will always be subsidized by the rest of India.

How do you decide the correct amount to spend on infra structure projects? Assuming direct profits alone is insufficient. The requirements and type of infra structure in Bihar is clearly different from the needs of Mumbai and Gujarat.

You feel 15 billion is too expensive for Mumbai but 5 or 10 billion ( or whatever the cost of railways in bihar) is fine. How do you come to that decision? Surely it can't be arbitrary ......just because 15 billion on one line seems too much? Maybe that 15 billion will give 20 billion returns on the economy for long term? A business in Mumabi adds manifold to the economy compared to a migrant worker in need of transport in. Bihar. A delay for him is less expensive. What about technology upgrades and there impact? Other intangibles? Have these calculations been done? I am asking that is all....