Indian government wants to build a bullet train between Mumbai and Ahmedabad, two major cities of India because it will be of convenience to people. This is the official reason. The on-official (real reason in my opinion) is different.
For this bullet train, Japan is offering India a loan of US $15 Billion (about 100,000 crores Indian rupees). A percentage of this amount will go as bribes to politicians and bureaucrats. A small percentage of a huge amount is also huge e.g. 10% of this amount is 10,000 crores. Any businessman in India will tell you, that a bribe of 5 to 10%, in a project, is normal.
If there was really a need for this bullet train, some private company could build it. But the Indian government knows that no private company will build it because this is a loss making proposition. There already exists airline routes and highways between these two cities. How many people will travel by the bullet train in India? The rich prefer airlines or car normally; the poor cannot afford bullet train.
Now, assuming that Indian fares are same as in other countries, then a second class travel by this bullet train, between Mumbai and Ahmedabad, will cost Rs 2,300. So to recover the investment, we need about 3000 crore travelers. Assuming that there are about 50,000 people interested in traveling daily, then it will take 27,400 years to recover the investment. The life of a bullet train with track is probably a few hundred years at the most, if well-maintained.
If the fare is increased, fewer people will use the bullet train. So increasing the fare will not benefit much. Overall the entire project is a loss making proposition. The tax payer will be left footing the bill.
So in this project, the winner is Indian politicians; the loser is Indian tax payer.
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