The Mumbai-Ahmedabad High-Speed Rail Project was offered highly favorable yen loans by Japan on the premise that Shinkansen technology would be used. India, however, has indicated a policy of adopting European signaling equipment, while the opening date continues to be delayed and total costs continue to rise.
Japan offered special support under which it would finance most of the total project costs, at an interest rate of 0.1%, with a 50-year repayment period and a 15-year grace period. India, meanwhile, has delayed the planned opening from 2023, and total project costs have risen from approximately 980 billion rupees to at least 1.87 trillion rupees.
Delays in land acquisition in India have been cited as a major factor behind the delays. India's Ministry of Railways has also acknowledged that delays in land acquisition affected the project through 2021. This has contributed to higher costs and delays to the construction schedule.
India announced a policy of awarding the contract for the core Shinkansen signaling and communications systems to a consortium including Germany's Siemens and DRA Infracon, rather than to Japanese companies. Japan regards this as a departure from the agreement, while India explains that the decision was based on discussions between the two sides.
ETCS Level 2, which the Siemens-led consortium will introduce, is a train control system with a track record in Europe. Japanese officials have expressed concern about the safety of the Shinkansen. India is also reportedly considering suppliers other than Japan for the rolling stock.