THE BULLET TRAIN JOYRIDE

One of the greatest human endeavours of all time is collapsing distance. The wheel, horse, chariot, ship, car, plane, Concorde, train and bullet train are all examples of this endeavour. The idea of an Ahmedabad-to-Mumbai bullet train that reaches its destination in just two hours has the potential to electrify a nation’s imagination like JFK’s man-on-the-moon decision.

As part of its election manifesto, the BJP proposed a plan for high speed rails, and E. Sreedharan, (the legendary “Metro Man”), has been rumored to be in the running for a key position in the Railway Ministry. However, there have been debates in the US and other parts of the world on the cost overruns and returns on investment of high speed railways. Most studies in the US and the west compare the benefits of high speed railway to road transport, reducing suburban sprawl and other urban planning concerns. The fundamental assumption in all these debates is that the car is the alternative means of transport to the train.

Most cost benefit analyses consider the total cost of ownership of cars, which includes not only the cost, but also the mileage and insurance costs. For example, insurance alone could cost between 2-10% of the total cost of a car in a typical American town like Gainesville in Florida. These micro-business-case-type comparisons are what drive most of the discussions on high speed bullet trains versus alternative transport mechanisms. However, India does not have the luxury of having the cars-versus-trains argument since its density of population is twelve times that of the US. The US has about 800 cars per 1000 people and if the US model is followed in India, Indians would need 960 million cars (in one-third the space).

Most experts already believe that the climate in the US has changed. Car usage is a big contributor to this factor. Now, if India follows a similar car driven model, can the planet afford another billion cars? Will the planet exist?

Besides the better-planet imperative, most critics also fail to envision all the positive externalities of a high speed rail system in India. It is like the Internet or the US federal highway system – there will be all sorts of sustainable scenarios and applications one cannot possibly fathom if one can get from Mumbai to Ahmedabad or Bangalore to Hyderabad or Delhi to Chandigarh in 2 hours.

Vinod Khosla, the legendary venture capitalist, had a very useful thought process on how to evaluate innovation and disruptive technologies. In the presentation, he revisits McKinsey’s famous projection of 900,000 cell phones by 2000 which turned out to be wrong by 99%. We can’t use linear benefit assumptions to understand the benefits of bullet trains in India.