India’s Modi Hampered by Lack of Quality Steel, Funds for Bullet Train Dreams

Sensing the shortfall in foreign investments in railroads, the Modi government recently privatized the management of a railway station in Central India. More are on the anvil.

New Delhi (Sputnik) — With half his tenure in Delhi over, Indian Prime Minister Narendra Modi is looking at several ways to deliver his election promise of the bullet train.

Lacking financial resources and even the basic head-hardened rail, the Modi government is looking at several countries to supply the rail, including model and rival China.

Indian Railways is expected to issue a global tender for procurement of head-hardened rails in the next few weeks. These rails will be used to modernize Asia's oldest rail tracks that have seen 11 railway accidents, eight of them because of derailment, in the last year. Despite being third in global steel production, India lacks the technology to make head-hardened steel.

The Railways need more than $140 billion in the next five years for modernizing rail networks. Railway Minister Suresh Prabhu and finance ministry officials have spent a substantial bit of time over the last two years in luring global investors to invest in Indian Railways.

In a recent visit to the UAE, Prabhu invited the Emirates to invest in infrastructure development in India, including the Railways. "Of the $140 billion we will be investing over the next five years, the majority will go towards India's modernization efforts, the introduction of new technologies, and increasing capacities. We have requested that the government of the UAE look at the huge potential for investment that lies in Indian infrastructure, particularly in the railways," said Prabhu.

The Modi government has managed to raise passenger fares in a country where more than 700 million people live on less than $2 per day. Though that was an unpopular decision, the government, a few days ago, assigned the management of a railway station to a private company. Some more stations will be allocated to private players to manage soon. Foreign investment in railroads has not taken off despite the government's efforts in 2015. In this year's Union Budget, the government has planned to sell the stake in profitable rail companies like Indian Railway Finance Corporation and the Indian Railway Catering and Tourism Corporation.

As for the bullet train, the Indian government has managed to get $15 billion from Japan to build a 508-km high speed track at a very cheap rate but when the project will take off is still intriguing middle-class Indians. This is so since $15 billion is close to one percent of India's $2 trillion gross domestic income.

The Indian Railways carry more than 23 million people daily on aging tracks with an average speed of 54 kmph.