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India's Indian Railways is preparing to absorb an estimated INR 90,000 crore escalation in the cost of the Mumbai -Ahmedabad bullet train project, raising the total project outlay to nearly INR 1.98 lakh crore from the originally sanctioned INR 1.08 lakh crore. The cost overrun, driven primarily by delays in land acquisition and associated logistical challenges, represents an approximate 83 per cent increase on initial estimates. Senior officials have indicated that additional borrowing from the Japan International Cooperation Agency is unlikely, with the railways instead planning to meet the shortfall largely through gross budgetary support and increased allocations from the Union Budget. The revised estimate will be presented for approval to the Union Cabinet, and the finance ministry is expected to explore funding options to ensure project continuity.
The Indian Railways is poised to manage a substantial cost escalation of approximately INR 90,000 crore in the high-profile Mumbai-Ahmedabad bullet train project, according to senior government sources. The escalation has taken the total estimated cost of the first high-speed rail corridor in India to almost INR 1.98 lakh crore, up from the original sanctioned budget of INR 1.08 lakh crore, representing an increase of around 83 per cent largely attributed to prolonged land acquisition delays and related logistical hurdles. Advertisement
The project officially known as the Mumbai-Ahmedabad High Speed Rail (MAHSR) Corridor is being developed by the National High Speed Rail Corporation Ltd (NHSRCL) with Japanese technical collaboration and funding. External funding through soft loans provided by the Japan International Cooperation Agency accounted for a significant portion of the original budget. However, railways officials have signalled that no additional borrowings from JICA or other multilateral institutions are likely, with the increased cost expected to be managed through government gross budgetary support and allocations under the Union Budget.
In the FY27 budget, capital expenditure support earmarked for the NHSRCL stood at INR 15,000 crore, marginally lower than the previous year's allocation. Officials said that revised funding requirements, including provisions to absorb the cost overrun, will be tabled before the Union Cabinet and that the railways will seek additional funds from the Ministry of Finance to maintain project execution momentum.
The high-speed corridor, spanning approximately 508 km between Mumbai and Ahmedabad, has marked progress on several fronts, including completion of foundation work at a majority of its stations. However, land acquisition bottlenecks have been a persistent challenge, contributing materially to cost increases and schedule pressures.
Government officials maintain that the absorption of the cost overrun reflects a commitment to delivering a national priority infrastructure project despite fiscal pressures. The bullet train initiative, envisioned to shorten travel time between the two commercial hubs to under two hours, remains a strategic pillar in India's transport modernisation agenda, with broader plans for additional high-speed corridors under active consideration in the coming years.
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