In 2023, Indian Railways is facing financial distress and construction efficiency issues while completing the 1,337-kilometre-long Eastern Dedicated Freight Corridor EDFC and a significant increase in freight traffic. Despite a number of important achievements, the decline in financial health has raised concerns, while the significant increase in capital expenditure has not led to significant improvements in operational efficiency, and the organizational restructuring has led to a decline in the efficiency of executive decision-making, creating uncertainty about the future. According to the Comptroller General and Auditor General's Report in March 2023, the operating ratio of Indian Railways reached 107 in 2021-2239%, up from 97 in the previous year45% is a significant increase. This means that for the first time, Indian Railways is spending more than it is earning.
Most developing countries suffer from inefficiencies in infrastructure development.
Taking India's Mumbai-Ahmedabad high-speed rail project as an example, India approved Japan to build India's first high-speed rail in 2015, and the project will use Japanese Shinkansen technology, with a total length of about 508 kilometers, including 12 stations such as Baroda and Surat. The total cost of the project is more than Rs 1 trillion, of which about Rs 100 billion is provided by India***, Rs 50 billion each is paid by Gujarat and Maharashtra**, and the remaining 80 per cent of the cost is paid by 01% interest rate on loans obtained. Established in 2016, India's National High Speed Railway*** is responsible for financing, construction, maintenance and management. In September 2017, Indian Prime Minister Narendra Modi and then-Japanese Prime Minister Shinzo officially launched the project. The project was originally planned to be completed in 2022, but due to the difficulty of land acquisition, construction did not officially start until November 2021, and the completion time was delayed again and again, and the project was only 10 kilometers completed at that time. As of January 2023, Maharashtra has expropriated 98Of the 22% land, 98% of Gujarat has been expropriated87% of the land. As of January 2023, the Mumbai-Ahmedabad high-speed rail project is only about 25 percent complete6%。
In other words, from the official start of the project in 2017 to January 2023, it took more than five years for India to complete 25% of the project, and at this rate, the remaining 75% of the work volume will not be completed until at least 2038. It took more than 20 years from the beginning of the project to the final completion, and this is still a small project of just over 500 kilometers. And if a country of India's size wants to build a high-speed rail network, it must be thousands of kilometers larger. It's been going for more than 100 years. Considering that India is still making extensive use of colonial railways, it may indeed be an ultra-long-term project.