Mumbai-Ahmedabad bullet train: Why did India-Japan sign the deal?
Prime Minister Narendra Modi is turning his world upside down again. He seems to have abandoned the attempt to reach out to the Opposition at home - an effort that was launched with some enthusiasm in the early days of the Winter Session of Parliament with the debate on intolerance and the invitation to Congress leaders for tea - and is, instead, clearly hoping that foreign policy will deliver him his legacy years.
Raid
With the CBI raid on Arvind Kejriwal's key aide, which came in the wake of the National Herald case against Sonia and Rahul Gandhi, Modi looks like he has returned to his familiar combat mode. In the current embittered political climate, few believe that the senior BJP leadership was not involved in embarrassing the Congress and AAP, that too in the middle of the Parliament session.
Enter Pakistan. The PM can't seem to have enough of the idea of changing the course of history. Or the idea that the "effort is worth it because the peace dividends are huge and the future of our children is at stake…" Seems like the penny has finally dropped in Race Course Road.
The visit of Japanese Prime Minister Shinzo Abe has been another big success, although it didn't come without its share of beneath-the-radar postponements. Both big deals, the bullet train from Mumbai-Ahmedabad as well as the nuclear agreement almost didn't happen, because both sides objected to key clauses.
For example, the bullet train, known as the Shinkansen in Japan, which the railway ministry has been uncomfortable with for several years. Former PM Manmohan Singh government had rejected pressure from former Japanese PM Junichiro Koizumi's government in 2005, because of the huge price tag involved, about Rs 1,800 crore per km. At the time Manmohan Singh asked, can we create a parallel rail system for the rich?
Priorities
According to Javed Usmani, joint secretary in Singh's office in 2005, Koizumi was pressing India hard to buy the Shinkansen, also on a similarly soft loan. But India "avoided being tricked into buying an over-priced bullet train toy," he says. Instead, India and Japan signed an agreement on the development and general overhauling of the Indian Railways in accordance with India's priorities.
So why did Prime Minister Modi in 2015 overhaul the decade-old argument? First, remember that his home state, Gujarat, is involved. Second, the PM likes the idea of the big idea shaking the lethargy of systems that would rather plod along presumably according to the Hindu rate of growth. Third, Modi wanted something big to show, not only to the Americans (whose ally Japan is) but also the Chinese (to whom Japan lost a big train rail deal recently in Indonesia).
Clearly, Prime Minister Modi likes the idea of a India-US-Japan trilateral taking on the world.
So India will now pay Rs 98,000 crore for the 500km Shinkansen corridor from Mumbai-Ahmedabad. It will all look glorious, of course, but remember that these two cities are connected in so many other ways already.
Remember, too, that one-third of the Rs 98,000 crore is tied aid, which means that India will have to pay Rs 30,000 crore for goods bought from Japan. Certainly, this is international practise. After all, nobody will give you technology for free, or near free (except, perhaps, if you are the former Soviet Union).
There is no problem with the Shinkansen. It's a beautiful train. I've been on it. It's wonderful, whizzing between transplanted rice fields on either side, an utterly beautiful and calm vista. When it smashes the seven-hour train ride from Mumbai to Ahmedabad and vice-versa, we will feel properly part of the First World.
But just look at the government's estimated expenditure on key sectors (all figs from Budget documents for 2015-16), all essential to grow India: on highways, schools and the modernisation of railways, Rs 42,000 crore each; on health, Rs 30,000 crore; on rail safety, Rs 25,000 crore. On Swachh Bharat, Rs 2.4 crore.
The real question, as Javed Usmani asks, is: what are India's priorities?
Money
And the even bigger question, how did this happen? How did India agree to this beautiful, but overpriced toy when the railways is constantly haggling with the finance ministry for more and more money to overhaul itself? (In fact, the railways has just taken a loan from LIC on low rates for modernisation purposes.) Who pushed it?
It appears that quid pro quos were made. The Shinkansen for the nuclear deal. Meaning, India would buy the Rs 98,000 crore bullet train from Japan, if Japan agreed to an agreement on the nuclear deal.
So a "cooperation" pact on nuclear matters was signed, which, in fact, admits that there is no such agreement. "The two prime ministers welcomed the agreement reached between the two governments on the agreement between the government of Japan and the government of the Republic of India for cooperation in the peaceful uses of nuclear energy…" Meaning, India and Japan can only sign a proper nuclear deal when Japan completes its internal processes.
Until then, there's nothing. The celebrations in Varanasi last week were overwhelming, but hopefully not premature. Now that India has bought the Shinkansen, Japan will hopefully soon deliver on its own side of the bargain. Certainly, a great deal of Modi's - and India's - reputation will be banking on this. Question is, why did India and Japan even enter into such a quid pro quo?