India and Japan on November 27 exchanged notes for Japan’s Official Development Loan Assistance ( ODA) worth Rs 5,536 crore for Chennai and Ahmedabad metro rail projects. The notes were exchanged here between S Selvakumar, Joint Secretary, Department of Economic Affairs and Yutaka Kikuta, from the Embassy of Japan to India.
Background:-
- The Japanese government of Japan has committed Official Development Assistance (ODA) loan of an amount of about Rs 1,080 crore for the Chennai Metro Rail Project (IV phase) and Rs 4,456 crore for Ahmedabad Metro Project.
- India and Japan have had mutually beneficial economic development cooperation since 1958.
- In the last few years, the economic cooperation between India and Japan has strengthened and grown into strategic partnership.
- With general political consensus and popular support for the greater cooperation between India and Japan, the partnership is poised for a great future, said the release.
- In October this year, Japan had offered to finance India’s first bullet train, estimated to cost $15 billion, at an interest rate of less than 1%.
- Tokyo was picked to assess the feasibility of building the 505-kilometer corridor linking Mumbai with Ahmedabad, the commercial capital of Prime Minister Narendra Modi’s home state, and concluded it would be technically and financially viable.
Why not China??
- In September, China won the contract to assess the feasibility of a high-speed train between Delhi and Mumbai, a 1,200-km route estimated to cost twice as much.
- No loan has yet been offered.
- Japan’s decision to give virtually free finance for Modi’s pet program is part of its broader push back against China’s involvement in infrastructure development in South Asia over the past several years.
- Japan has offered to meet 80% of the Mumbai-Ahmedabad project cost, on condition that India buys 30% of equipment including the coaches and locomotives from Japanese firms.
