The proposed bullet train between Mumbai and Ahmedabad will have to ferry 88,000-118,000 passengers per day, or undertake 100 trips daily, for the Railways to keep it financially viable, according to a report by Indian Institute of Management Ahmedabad (IIM-A).


The report, titled, "Dedicated High Speed Railway (HSR) Networks in India: Issues in Development,' states that if the Railways set the ticket price at Rs 1500 for 300 km drive per person 15 years after the operation, it will have to ferry between 88,000 and 110,000 passengers every day to ensure that it repays the loans with interest on time.


Japan has offered a concessional loan of Rs 97,636 crore to fund about 80 per cent of the project cost with a repayment period of 50 years beginning from the 16th year of operation at an interest rate of 0.1 per cent. For the remaining 20 per cent loan, the authors assume 8 per cent average rate of interest (on Rs 20,000 crore to be funded by the Centre).


Japan has offered a 15-year moratorium on loan, so revenue concerns for the Indian Railways will arise from the 16th year, the authors state in the paper.