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Modi's loss in state election raises questions about bullet train

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By Shilpa Jamkhandikar and Rajendra Jadhav

MUMBAI (Reuters) – India’s richest state is set to be ruled by parties opposed to Prime Minister Narendra Modi’s nationalist Bharatiya Janata Party, jeopardising a Japanese-backed bullet-train project opposed by farmers.

The BJP’s inability to pull together voters in the westerly state of Maharashtra, of which Mumbai is capital, has meant that three parties, including a former BJP ally, will form the government. That is a major setback for Modi after his landslide victory in general elections this year.

It could also hinder the bullet train project, a $17 billion investment largely financed by a long-term, low-cost loan from Japan. The BJP was in power in both Maharashtra and Gujarat states when work began on project in 2017.

“We have always opposed the bullet train,” said Manisha Kayande, a spokesperson for the Shiv Sena, a former BJP ally whose leader is now set to head Maharashtra. “Our state is giving a major chunk of money for the project, when most of the track is in another state. This will definitely be re-framed,” .

The train will run from Mumbai to Ahmedabad, the main city in Gujarat state, a distance of 508 kilometres (315 miles). But it has run into obstacles acquiring land amid opposition from fruit farmers.

Any delay of the project is likely to undermine investor confidence, at a time when growth has slowed to its weakest pace in years.

Critics say India does not need the high-speed train and investment should go instead to improve the existing network.

“We are not against development or infrastructure projects, but at the same time farmers’ interests can’t be ignored. We will rethink about projects that farmers are opposing,” said a senior leader of Nationalist Congress Party, which is a part of the coalition government.

National High Speed Rail Corporation (NHSRCL), the government agency overseeing the project, had no immediate comment.

The authorities have acquired 548 hectares land out of the total requirement 1,380 hectares and the project was targeted to be operational by 2023 , the government told parliament in July.

Protests against land acquisitions are common in India, where tens of millions of farmers till small holdings. A planned $44 billion refinery to be run by a consortium including Saudi Aramco, the world’s biggest oil producer, is also struggling to secure land in Maharashtra.

(Reporting by Shilpa Jamkhandikar and Rajendra Jadhav; editing by Sanjeev Miglani, Larry King)

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