Time for Centre to embrace cooperative federalism for bullet train project? – Economic Times

Posted: June 30, 2021 at 2:47 pm

Last week, China started operating the first bullet train in Tibet, linking Lhasa to Nyingchi near the border with Arunachal Pradesh. The construction of this 435 km line began in 2014 in one of the toughest terrains with 90 per cent of the track being 3,000 metres above sea level. A senior Chinese Communist party official who was formerly in charge of Tibet has spoken about rapid trade and economic benefits to the region and dropped ominous hints about the rail line acting as a fast track for the delivery of strategic materials in case of a border crisis with India. Over the last 15 years, China has developed the worlds longest high speed railway network with a total length of 37,500 km, accounting for two-thirds of the worlds high speed railway network.

Indias maiden effort in construction and operationalising a 508 km high speed railway corridor connecting Ahmedabad in the capital of the Prime Ministers home state of Gujarat with the countrys financial capital, Mumbai, stands in stark contrast to the clinical precision with which the Chinese have executed their mammoth infrastructure projects.

The construction was expected to begin in April 2020 with December 2023 as its initial completion date, which has now been pushed to December 2028, as only 23 per cent of 156 km of land has been acquired in Maharashtra as against 95 per cent of 348 km in Gujarat and 100 per cent of 4 km in Dadra and Nagar Haveli.

A closer look at the history of this marquee project of national importance will throw light on some of the key reasons for the delays and impediments.

The project was originally conceived in 2009-10 under the Congress-led UPA government as the 650 km Pune-Ahmedabad high speed railway corridor via Mumbai but the Pune-Mumbai leg was dropped in March 2013 under the UPA government by advancing specious reasoning of financial constraints.

A project that should have been a beacon of Prime Minister Narendra Modis cherished principle of cooperative federalism has ended up being badly embroiled as a centre-state dispute with simmering discontent among the citizens of Maharashtra. Both in the 2014 and 2019 Lok Sabha elections, 11.4 crore citizens of Maharashtra reposed their unflinching faith in the dynamic leadership and progressive, development-oriented policies of the Prime Minister by returning unprecedented mandates. A strong belief that the central government would espouse projects that would expedite rapid economic progress underpinned these mandates.

Of the total project cost of Rs 1.1 lakh crore, the Japan International Cooperation Agency (JICA) has agreed to provide 80 per cent (Rs 88,000 crore) as a 50-year term loan at a meagre 0.1 per cent interest rate and a moratorium on repayments for 15 years. The remaining 20 per cent would be infused as equity contribution with 10 per cent (Rs 11,000 crore) being contributed by the Centre and 5 per cent each (Rs 5,500 crore) by Maharashtra and Gujarat. The government of Maharashtra had initially readily agreed to provide its share of equity for the project.

The Centre was insistent that a large, prime piece of land in Mumbais financial hub of Bandra-Kurla Complex (BKC) be allotted for constructing a terminus in Mumbai. The previous Maharashtra government led by the BJP and its allies and those in the Opposition were strongly opposed to this as Maharashtra was intending to build the International Financial Services Hub at that very spot. Not only would this hub have catapulted Mumbai as one of the top global financial centers but would also have yielded the state thousands of crores in revenue over the years. There is a widespread belief that the previous state government had cravenly given in to the immense pressure from the Centre and compromised the interests of its citizens by not being able to convince the Centre to opt for another alternative plot for the terminus in Mumbai and include more cities from Maharashtra like Pune and Nashik in the proposed route.

Citizens of Maharashtra are happy that their brethren from the neighbouring state of Gujarat would derive enormous trade and economic benefits as a result of connectivity of key cities of Ahmedabad, Vadodara, Anand, Bharuch, Surat, Valsad and Vapi with Mumbai. Besides providing efficient and quick connectivity for the approximately 19 per cent citizens of Gujarati origin staying in the vibrant Mumbai Metropolitan Region (MMR) with their ancestral state, the bullet train would act as a force multiplier for trade and economic activities in Gujarat, especially for the Gujarat International Finance Tec-City (GIFT City) at Ahmedabad, the textile and diamond behemoth of Surat that is building Indias largest Diamond hub (Diamond Research & Mercantile city or DREAM), the chemical and pharmaceutical industries in Vapi and Vadodara etc.

The legitimate question being posed by the citizens of Maharashtra who are contributing an equal amount of equity capital as Gujarat and parting with a prime parcel of land that would have been its International Financial Centre is whether the Centre is not committing grave injustice by scrapping the Pune-Mumbai leg of the proposed original route and not including the emerging industrial hub of Nashik by building a short spur on the route. Nashik holds the distinction of being one of the four holiest of the holy places that hosts the sacred Kumbh. It is one of Indias leading agro-processing hubs particularly for onions and grapes (the wine manufacturing capital of India), has many key defense establishments at Deolali and Ozar like HALs plane manufacturing township, and is home to a vibrant engineering and automobile cluster of industries.

Reports of Nashik and Pune being part of future bullet train projects connecting Mumbai to Nagpur and Mumbai to Hyderabad, respectively, are widely perceived to be red herring intended to placate the rising discontent among the states citizens and kicking the can down the road to a distant and uncertain future. No wonder there is mounting opposition in the state for facilitating the acquisition of land for a project whose costs far outweigh the benefits for the citizens of the state. A resource crunch due to the once-in-a-century pandemic has put additional pressure on the states coffers to optimize its costs.

This simmering discontent and disenchantment can easily be addressed if the Honourable Prime Minister intervenes personally and upholds the principle of cooperative federalism, by including the cities of Pune and Nashik in the route and directing the implementing agency to consider any suitable alternative plot for the development of terminus allowing the state to develop its International Financial Centre. This singular intervention would go a long way in allaying unfounded apprehensions gaining ground about grave injustice being meted out to Maharashtra and its citizens and reduce the trust deficit. It would help in creating a conducive environment for the state government to convince its citizens to part with their land for a project that would benefit them. It would be a fitting example of adherence by the Centre to the precept of Sabka Saath, Sabka Vikas and Sabka Vishwas.

(Ajay Bodke is a politico-economic analyst. Views are his own)

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Time for Centre to embrace cooperative federalism for bullet train project? - Economic Times

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