Bullet train must ferry 88,000 to 118,000 passengers daily to make it financially viable

A report by the Indian Institute of Management Ahmedabad (IIM-A) has indicated that the proposed bullet train between Mumbai and Ahmedabad will have to ferry 88,000-118,000 passengers daily or undertake 100 trips daily so that it can become financially viable. One train usually carries 800 passengers, therefore, to carry 88,000 passengers daily, it would be necessary to make a total 100 trips, or 50 trips each way. Or - three trains should run every hour in each direction.
This is certainly a tall order and, considering the fact that the bullet train would not carry any and every Tom Dick and Harry, it would be a tough proposition for the railways.
This has been reported in ibnlive.com dated 18 April 2016.

It has been stated in the report, titled, "Dedicated High Speed Railway (HSR) Networks in India: Issues in Development" that - if the Railways set the ticket price at Rs 1500for 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.
The bullet train is being undertaken with loan from Japan who have offered a concessional loan of Rs 97,636 crore to fund about 80 per cent of the project cost with a repayment period of 50 years beginning from the 16th year of operation at an interest rate of 0.1 per cent.
To repay the remaining 20 per cent loan, the report makes an assumption of 8 per cent average rate of interest (on Rs 20,000 crore to be funded by Centre). Since Japan has offered a 15-year moratorium on loan, the revenue concerns for the Indian Railways will begin from the 16th year.
The total distance covered by the train will be 534-Km.


Image courtesy wikimediacommons.org

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