Japan offers India soft loan for $15 billion bullet train

[Shotgunner51]

"There are several (players) offering the high-speed technology. But technology and funding together, we only have one offer. That is the Japanese," said AK Mital, the chairman of the Indian Railway Board, which manages the network.

This is the key point, if the preferred deal is sale bundled with investment as reported in the news, then it surely belongs to the only contestant, i.e. Japan, if it ever materializes.

There is no point for China to further engage in the negotiation other than acquiring info or gaining experience in the process. Note, this investment scenario is largely different from countries like Russia, Indonesia which are way more developed, hence sale deals may go along with heavy investment.

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[TaiShang]

That's refreshing to know @Shotgunner51 .

Japan should get the job -- if ever there is such a thing at all. Efficiency is not the most popular characteristics of Indian government, after all.

 

[Mirza Jatt]

That's refreshing to know @Shotgunner51 .

Japan should get the job -- if ever there is such a thing at all. Efficiency is not the most popular characteristics of Indian government, after all.

In other words are you saying Japanese technology is not efficient and only China is efficient ??

 

[TaiShang]

In other words are you saying Japanese technology is not efficient and only China is efficient ??

No, Japan is more efficient than China to handle a project like this in India. That's what I meant. Hence, I encourage Japan to get the job if there is a tender.

 

[Spectre]

No, Japan is more efficient than China to handle a project like this in India. That's what I meant. Hence, I encourage Japan to get the job if there is a tender.

It won't be either/or. Pie is big enough for both Japan and China. Already Chinese investments, loans to Indian infrastructure companies in form of both short term trade credits and long term project finance and heavy plant and machinery sales far outstrip that of Japan.

China is an important partner of Indian Development Story on par with Japan. Both of these countries leave US and Europe far behind in terms of actual participation and contribution in Indian Infra Sector.

In-fact dealings with Chinese executive is refreshingly frank and productive these days.

Today's geo-politics is driven by commerce not the other way around. Even hard-core anti-China lobbies in India sponsored by US have to take a back-seat to our increasingly fruitful commercial relationship.

 

[TaiShang]

It won't be either/or. Pie is big enough for both Japan and China. Already Chinese investments, loans to Indian infrastructure companies in form of both short term trade credits and long term project finance and heavy plant and machinery sales far outstrip that of Japan.

China is an important partner of Indian Development Story on par with Japan. Both of these countries leave US and Europe far behind in terms of actual participation and contribution in Indian Infra Sector.

In-fact dealings with Chinese executive is refreshingly frank and productive these days.

Today's geo-politics is driven by commerce not the other way around. Even hard-core anti-China lobbies in India sponsored by US have to take a back-seat to our increasingly fruitful commercial relationship.

That's a valid point but what I am really concerned is if something goes wrong due to mismanagement or the like all the hell will break on China.

India will not necessarily be understanding, given that politics is very populist.

In those situation, Japan is more able to weather the storm because the Western press will not pick on them due to geopolitical factors.

I am in favor of China working with more friendly governments and peoples. If risks are to be taken, better take them in those countries. India seems to be good for risk-free business for China.

 

[skyisthelimit]

If the Indian government handles it right, they should let China and Japan fight it out. Politically and emotionally they want Japan to have the business. But, China's power is just too great to be ignored. The most likely scenario is both China and Japan will end up getting a piece of the pie, a huge, huge one that is

I agree. India plans to have 3-4 bullet train routes to link major 4-5 cities. India can evenly distribute between Japan and China. Both countries happy to work. India can also take advantage of such competition and ask them to contribute towards Make in India. They will surely do, at end of the day its all about making money.

 

[Shotgunner51]

That's a valid point but what I am really concerned is if something goes wrong due to mismanagement or the like all the hell will break on China.

India will not necessarily be understanding, given that politics is very populist.

In those situation, Japan is more able to weather the storm because the Western press will not pick on them due to geopolitical factors.

I am in favor of China working with more friendly governments and peoples. If risks are to be taken, better take them in those countries. India seems to be good for risk-free business for China.

Yes, that's one non-economic factor behind evaluating an investment scenario, especially in public utilities. Unfriendly public, hostile local media, strong western influence, obviously create an undesirable environment for investments from China. On the other hand, Japanese investment wouldn't have such an issue.

 

[Spectre]

That's a valid point but what I am really concerned is if something goes wrong due to mismanagement or the like all the hell will break on China.

India will not necessarily be understanding, given that politics is very populist.

In those situation, Japan is more able to weather the storm because the Western press will not pick on them due to geopolitical factors.

I am in favor of China working with more friendly governments and peoples. If risks are to be taken, better take them in those countries. India seems to be good for risk-free business for China.

I agree in case of any accidents optics of the China Hand will be negative when you compare it to Japan/US/Russia.

I can only say slowly the perception is changing among common Indians. Already millions of Indian deal with China directly and many more indirectly in trade and have had positive experiences. With time I think we can put the past differences behind and become the leading partners in the world.

My Friend days of being in one camp or the other are gone - now days everyone looks after their own interest first as evidenced by China - UK relationship. India and China too are collaborating on Govt to Govt level on multiple forums with India being one the leading contributors in AIIB and fellow SCO and BRICS member. I have already said above that people to people ties are increasingly becoming better - you only have to look at number of Indians visiting China each year and see the growth.

To end - We are mature countries and are very capable of working and prospering together despite our differences and seemingly divergent political stratagem. India looks at China as an inspiration - just look at the speeches of Indian politicians who so often try emulate China. Western Media can only make loud noises

 

[Sanchez]

China should not compete projects related to Indian or VN infrastructure. Let em pay more to the Japanese.

 

[TianyaTaiwan]

I hope Japan helps India to build high-speed train.
我说的是真心话,感觉yindu是个坑,就让riben去跳吧.

 

[Aepsilons]

India is a big country with a population of 1.2 billion and the world's fourth largest GNI. While its rapid economic growth, enormous amount of investment is still necessary for development of infrastructure such as roads, railways and other urban transportation systems, power, water supply and sewerage. India also must take measures to reduce poverty for huge population living under poverty line. JICA is actively providing assistance to construct infrastructure as well as poverty alleviation.

On August 1, 2011, a Comprehensive Economic Partnership Agreement between Japan and India went into effect, and 2012 is a memorable year of the 60th anniversary of Japan-India diplomatic relations. JICA is providing assistance to realize Japan-India cooperation such as the Delhi-Mumbai Industrial Corridor (DMIC) and the Chennai-Bengaluru Industrial Corridor (CBIC) in South India, as well as assistance to strengthen Japan-India academic-industry networks, and human resources development for industries such as manufacturing. JICA is extending its assistance to contribute to stronger relations between Japan and India in any capacity.

 

[Edison Chen]

Whoever finally gets the deal, Japan or China, India is always the beneficiary, Indian will get the best offer from competition.

What I feel interesting is that Japan is passively competing with China in biding for every big infrastructure project in Asia-Pacific and the world.

 

[Shotgunner51]

India is a big country with a population of 1.2 billion and the world's fourth largest GNI. While its rapid economic growth, enormous amount of investment is still necessary for development of infrastructure such as roads, railways and other urban transportation systems, power, water supply and sewerage. India also must take measures to reduce poverty for huge population living under poverty line. JICA is actively providing assistance to construct infrastructure as well as poverty alleviation.

On August 1, 2011, a Comprehensive Economic Partnership Agreement between Japan and India went into effect, and 2012 is a memorable year of the 60th anniversary of Japan-India diplomatic relations. JICA is providing assistance to realize Japan-India cooperation such as the Delhi-Mumbai Industrial Corridor (DMIC) and the Chennai-Bengaluru Industrial Corridor (CBIC) in South India, as well as assistance to strengthen Japan-India academic-industry networks, and human resources development for industries such as manufacturing. JICA is extending its assistance to contribute to stronger relations between Japan and India in any capacity.

Very well said! The world is a big place, there is huge demand for both Japan and China, the two largest creditors on earth, two leading industrial-exports powerhouses, to invest and build a wide array of infrastructure. As you mentioned roads, railways, urban transportation, power generation, water supply and sewerage, I might also add sea ports, hydraulic engineering, power grid, data grid, civic facilities, etc. According to ADB and AIIB estimation, infrastructure finance gap before 2020 is in the order of $ trillions.

Very impressed by JICA achievements in India! Given favorable and already established position, Japan should continue to develop the country, while China can focus on countries along OBOR (Eurasian Economic Belt, Maritime Silk Road) and other resources-rich countries in the Global South (e.g. South America, SSA). All the best!

 

[huskie]

Soft loan works like any promotion, and they are almost always intended to rake in higher profit in the future. There is simply no free meal. It is the same thing as free printers 'gifted' to large organizations--you only have to buy ink and other equipment exclusively from me at increased prices. The soft loan from Japan also requires at least 30% of it has to be spent on Japanese equipment. And what about maintenance?

Let's take a look at Japan's only exported HSR system, mainly the Taiwan HSR. It has been on the brink of bankruptcy since its inauguration, and only recently survived because Taiwanese government bailed it out with taxpayers money (which means the original BOT plan completely failed). Major problems of THSR include: 50% increase in construction cost compared to original budget, unrealistic ridership estimation, exclusive contract with Japan resulting in extortionate maintenance costs, and the last but not least, no tech transfer at all which means any new train, any new extension will have to come from Japan with a very high price tag. India will have to learn these Japanese tactics, because I don't think Chinese trains will be running in India in any foreseeable future due to political issues.

India needs to sort out a lot of stuff before even seriously consider any proposal, even if funding is not an issue(it is and will always be btw). That is why HSR isn't going to happen in India for at least another decade. and I am talking the start of construction. IMO the current HSR fever in India isn't healthy at all. Study per study, even on the same route, have been produced. And if the line isn't going to be built in another 10 years, you will need a new study in the future. Somehow I think this is just another way to cater to the voting banks--hey look, we too are going to build HSRs, and we are working really hard (but I am not gonna tell you all the hard work is to do studies). Will Modi sacrifice the IR long term benefits for exchange of one white elephant HSR in his relatively short term as PM? Why not focus on increasing the speed on the current system, and upgrade the signal systems and buy some bullet trains to gain first hand experience, that alone will take more than a decade. Right now that priority is mixed with other fancy plans and I don't see any real progress in it.