Food and Agriculture Organisation (FAO) former chief economist C T S Nair has said that if implemented, the High Speed Rail Corridor will end up as a travel option for the super rich and those whose travel will be paid by government or companies.
Nair expressed concern over the economic viability of the high speed rail corridor in Kerala and whether the state should consider this as a priority at all.
He said that the project, with an investment cost almost double the state’s budget, is being implemented even without a casual analysis.
Taking just the interest component of the investment into consideration, Nair said that there would be a cost overrun, making it unaffordable to general public and nonviable to the state.
“Even with a five per cent interest rate, the annual interest on the cost of investment alone will be Rs 5,900 crore per year or about Rs 16.2 crore per day.
“To make the project feasible at the projected traffic estimate, the ticket costs will have to be very high,” Nair said.
“Obviously at such costs, the number of passengers will go down and the ticket costs will go up even more, making travelling on high speed rail corridor a travel option for just the very-rich. What is now a milking cow will later on become a white elephant,” he said.
Assuming that passengers will shift from existing rail, bus and car travels, DMRC’s base traffic estimate touches 48,310 trips per day in 2021. Nair said that this is an over-estimate as only a small percentage of the state’s commuters will be able to afford the ticket cost of Rs 3,353, which will cover just the interest on initial investment.
“Factors such as operational and maintenance costs, energy consumption, displacement and compensation for people, social impacts and ecological implications have not been considered,” Nair said.
Pointing out that accumulating debts on high speed rail had led to the disbanding of the Japanese public rail, Nair said that the Economist, assessing proposals for such high speed rails in UK and Brazil had concluded that Britain should ditch the project and other countries should reconsider plans.
“A good infrastructure scheme has a long life. But a bad one can derail both public finances and a country’s development ambitions,” he said.
Nair said that the high speed rail corridor was excellent to connect two highly populated towns separated by relatively barren land. The suitability of the project cutting through the densely populated state, which will not have provisions for over-pass or under-pass, has to be widely debated before going in for implementation.
“Besides, the economic situation in countries that have implemented high speed corridor is far better than India. While the project may sound attractive, whether it suits our income and demography is a matter of debate,” he said.