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The Mumbai-Ahmedabad high-speed train project will require major financial support from the Government of India.
According to findings of the French railway operator SNCF, the project would operate at a low internal rate of return of 2.4% if it were developed through the PPP model. Additionally, the government would have to fund at least 50% of the total costs.
The total project investment is estimated at between Rs700 billion (US$11.3 billion) and Rs900 billion (US$14.5 billion).
But there is an alternative, Western Railway (WR), a state-owned railway company, has submitted a proposal to reduce travel time between Ahmedabad and Mumbai by about two hours. The WR project aims to increase the speed of some trains on the corridor to 160 km/h. The project involves infrastructure improvement works on the 493 km corridor including improvement of tracks, barricading of vulnerable locations and regulating the over head equipment, among others.
WR chief public relations, Sharat Chandrayan, said that WR has submitted initial estimates to the Railway Board of India. If the initial estimates are approved, a detailed estimate will be prepared and tenders invited.
With these improvements, the time taken to travel between Mumbai and Ahmedabad would go down to four hours and 15 minutes against the current travel time of six-seven hours.
This project would require a total investment of Rs11 billion (US$178 million).
MS Mathur, the Executive Director of PPP at the Railway Board of India, recently said the annual capital expenditure of Indian Railways would not have funds to support high-speed trains from current resources.