2019-08-11_Business_Today

dia is `6,606 crore (as on March
31, 2018). In this case, the tenure of
the loan is 40 years and the rate of
interest is 7 per cent, with a mora-
torium period of 10 years. In case
of Chennai Metro Rail Ltd., JICA
sanctioned loans in four tranches.
While the first tranche, sanctioned
in November 2008, carried an an-
nual interest of 1.2 per cent, the
second, third and fourth tranches,
sanctioned between April 2010
and March 2016, are repayable in
half-yearly instalments over 30
years (10-year moratorium from
the date of the agreement and re-
payment of 20 years).
These soft loans serve another
purpose for the Japanese. They
have clauses to ensure that at least
some of the project work is award-
ed to Japanese companies or joint
ventures. For instance, Japanese
firms Kumagai Gumi Co. Ltd,
Itochu Corporation, Shimizu Cor-
poration, Mitsubishi Corporation
and Sumitomo Corporation have
bagged major DMRC contracts as
a consortium. Kumagai Gumi Co
was part of the consortium that
designed and built civil works and
ventilation & air conditioning for
the Vishwavidyalaya-ISBT section.
The Mitsubishi Corporation-led
consortium bagged the contract
for design, manufacture, supply
and commissioning of rolling stock
for metro and rail corridors.
In some states, the Japanese
government is funding multiple projects. In Tamil Nadu, this includes,
in addition to the Chennai Metro project, the Hogenakkal Water
Supply and Fluorosis Mitigation project, the Tamil Nadu Biodiversity
Conservation and Greening project, the Tamil Nadu Transmission
System Improvement project, the Tamil Nadu Urban Health Care proj-
ect and the Tamil Nadu Investment Promotion Program. The agency
is also supporting the national highway improvement project in Bihar,
the water supply project in Guwahati, Assam, the Biodiversity Conser-
vation and Forest Management project in Sikkim and the Horticulture
Intensification by Micro Drip Irrigation programme in Jharkhand.
The list is long. It is supporting or has lent support in India to around
60 projects. What needs to be watched out for now is the Mumbai-
Ahmedabad High Speed Rail (MAHSR) bullet train project. The
project will see Japanese high speed rail technologies (SHINK AN-
SEN system) being introduced in India. While the National High

100 I BUSINESS TODAY I August 11 I 2019

JAPAN SPECIAL > G2G HOW

JAPAN

HELPS

India is

JICA’s largest

development

partner in the

world

Of the 29

states, 25

have projects

that have

got financial

assistance

from Japan

In 2017/18

alone, the

commitment

was `25,000

crore,

disbursement

`16,000 crore

ANNUAL

INTEREST

RATE

1.5%

YEARS

(10-YEAR

GRACE

PERIOD)

REPAYMENT

PERIOD

30

YEARS

(12-YEAR

GRACE

PERIOD)

REPAYMENT

PERIOD

40

INTEREST

RATE FOR

CONSULTANCY

SERVICES

0.1%

WHAT INDIA PAYS FOR IT

Speed Rail Corporation Ltd, the im-

plementation agency, has commenced

the construction of a training insti-

tute in Vadodara, Japan has already

announced a provision for a soft

ODA loan amounting to JPY 100

billion. The project, which starts

from the Bandra Kurla Complex in

Mumbai and ends near the Sabar-

mati railway station in Ahmedabad,

will cover 508.17 kilometre. It will

open a new chapter in India-Japan

cooperation.

@joecmathew

Transport

64%

Metro

33%

Freight

Corridor

17%

Others

14%

Others

24%

Water

12%

Major sectors

that got JICA

support between

2008/09 and

2017/18