What India can learn from China's bullet trains

China is home to the fastest and the most profitable bullet train services in the world.

 |  Beijing Diary  |  4-minute read |   28-09-2017
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While India and Japan this month marked the start of work on what would be India’s first bullet train line — a 500km route linking Mumbai and Ahmedabad that will start operations in 2022 — neighbouring China marked a different milestone.

On September 21, China put into operation the world’s fastest bullet train service — a 350km per hour bullet train between Beijing and Shanghai, using a new bullet train model called the Revival Express, an upgraded version of the Harmony Express trains now being used across China.

It is faster than Japan’s Shinkansen trains that run at 320-km per hour. It brings down the 1,300-km journey — roughly the distance between Mumbai and Delhi — by half an hour, to under four-and-a-half hours. The Beijing-Shanghai bullet train has already been a success and has forced airlines to reduce airfares between two of China’s biggest cities.

As much as Japan’s model has been in the spotlight as India debates the merits and costs of going ahead with a bullet train network, the China example is in some sense more instructive, given that China is closer to India when it comes to geographic, demographic and economic factors. Unlike in Japan, where the Shinkansen links high-density and high-income population clusters, in China, the bullet train network has to cover much larger distances

Unlike in Japan, where the Shinkansen links high-density and high-income population clusters, in China, the bullet train network has to cover much larger distances.

As of the end of last year, China has 22,000 km of bullet train track. China has put in more than $360 billion (Rs 23,65,000 crore) into the network. This runs separately from the rest of the rail network. Since the first line was built in 2007, China has laid around 2,000km of track every year.

By way of comparison, the 500km Mumbai-Ahmedabad line will take five years. Land acquisition has been largely for stations, as the bullet train runs on elevated track, thereby reducing the need to acquire vast amounts of rural land.

The Beijing-Shanghai line is an interesting case study. According to official figures, it is the only hugely profitable line. Last year, it made a net profit of $1 billion (Rs 6,571 crore), the most made by any bullet train line anywhere in the world.

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The cheapest ticket on this line 553 Yuan (around Rs 5,500), while a business-class fare is 933 Yuan (Rs 9,000) and first-class is 1,748 Yuan (around RS 18,000). A one-way flight would cost between 500 and 1,000 Yuan, but the reliability of trains (and China’s poor track record with flight delays) is a major factor for their popularity. (Bullet trains are never late in China, without exception.)

The other factor is that both cities have sizeable high-income populations to sustain traffic. Beijing and Shanghai’s GDP per capita is $17,000 (Rs 1,116,305), twice the national average. What is to be kept in mind is the average income of bullet train passengers in China is 35 to 50 per cent higher than normal trains. Business travellers accounted for 63 per cent of Beijing-Shanghai traffic. The number in other routes was around 30 to 40 per cent.

The World Bank says that “signs are encouraging” for other routes as well with bullet passengers growing at more than 40 per cent annually since 2008, and reaching almost 1.1 billion in 2015. What have been the benefits? It has freed up the conventional train network for greater freight use, which is a big revenue-earner. The downside is the reduction in conventional trains, which was needed to free up freight use, has greatly reduced options for lower income passengers and forced them to pay higher fares for the bullet network.

The World Bank argues there are other spillover benefits harder to measure, for instance, halving the distance to the prosperous Guangdong coastal region, one study said, raised business productivity by 10 per cent in certain areas.

The study indicates the demographic profile of bullet passengers suggests two things: the lines in China that are making profits require a sizeable high-income segment as well as a large enough urban centre to sustain the traffic. After Mumbai-Ahmedabad, other routes now being considered in India are Mumbai-Nagpur and Delhi-Nagpur. It isn’t clear what prompted the selection of these routes, but whether they fit the bill remains to be seen.

(Courtesy of Mail Today.)

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Ananth Krishnan Ananth Krishnan @ananthkrishnan

The writer is China correspondent for India Today.

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