Maharashtra govt relents after opposing grant of land for bullet train project

After opposing the grant of land to the Centre's ambitious bullet train project, the Maharashtra government has relented by conditionally agreeing to hand over a certain land area through a Government Resolution (GR), which is based on the state cabinet's decision.

The development comes a day ahead of the laying of the foundation stone of the project in Ahmedabad by Prime Minister Narendra Modi and his Japanese counterpart Shinzo Abe on Thursday.

The GR states that the Ministry of Railways should first explore the viability of the options of land suggested by the state government. The state government will make 0.9 hectare of land in the Bandra-Kurla Complex (BKC) available for the bullet train's station if the Railways can assure that the project won't become a hurdle for the state's proposed International Financial Service Centre (IFSC) to be set up in the same area.

The GR mentions that the BKC land will be used only for entrance, exit and ventilation in the bullet train station. The state government has valued it at Rs 125 crore, a sum that will be adjusted in the state's share in the project.

A Special Purpose Vehicle (SPV), to be formed for the project, will cost Rs 20,000 crore. The Centre will have a share of Rs 10,000 crore in it, whereas Maharashtra and Gujarat will have shares of Rs 5,000 crore each.

The Maharashtra government's decision is being seen as its bowing under pressure to the Centre's project at the cost of its IFSC. While sanctioning the land transfer, the state government has claimed that the bullet train project will help improve the state's infrastructure and increase passenger movement.

A senior official with the office of Chief Minister Devendra Fadnavis, however, claimed that the decision was a bargaining tactic and not surrender. "We have also proposed a bullet train between Mumbai and Nagpur. We expect the Japan government to fund this project too just as it is involved in the Mumbai-Ahmedabad bullet train project," he said.

The Japan government's JAICA (Japanese International Cooperation Agency) will lend Rs 80,000 crore for the bullet train project at an interest rate of 0.1 per cent for a period of 50 years. "If Maharashtra gets a similar type of loan for the Mumbai-Nagpur project, we will be in a position to say that our opposition to handing over the land was meaningful", the official said.

The Opposition has alleged that the Centre is deliberately creating hurdles in the setting up of IFSC to benefit PM Modi's home state Gujarat. The Gujarat government is setting up Gujarat International Finance Tec-City (GIFT) to attract international investors. If GIFT becomes functional before IFSC, it will hurt Maharashtra significantly as luring investors will become a tougher task.

BULLET TRAIN AT A GLANCE

ROUTE - Mumbai, Thane, Surat, Vadodara, Ahmedabad

STATIONS - 12 (4 in Maharashtra, 8 in Gujarat)

COST - Rs 1,10,000 crore

JAPAN's LOAN AMOUNT - Rs 80,000 crore

DISTANCE - 508 km

SPEED - 300-350 km per hour