steveintoronto
Superstar
Almost every major rail project in this nation has been financed abroad. CP was from the day it offered bonds, and it still is. Of course, one they start failing, then the happy taxpayer buys out the mess and proclaims it "National".hmm i wonder if we'll ever have the political courage to do what india is doing and financing their construction from another country. Might be risky if the economy is bad but seeing their theirs is booming they can afford to risk it.
clearly our funding models has not worked as of late, maybe its time to think outside the box more....
What I find astounding about that Japanese offer to India is the financing rate figure:
Now there's got to be more to it than that, but let's just assume for a moment that CRRC make a deal to (the Minister of Transport? Whomever) to establish a company for, build a railway, and equip it with both electrical systems and rolling stock, all wholly owned by the same vertical company (as surely the Japanese are doing with India, Kawasaki, Hitachi or whomever), and offer it to be paid by term with an interest of "0.1% interest-rate"....Holy Moly! How could they so no? The Gov't can't even get a loan at that low a price! Even guaranteed.More than four-fifths of the project’s $19bn (£14.4bn) cost will be funded by a 0.1% interest-rate loan from Japan as part of a deepening economic relationship that both countries hope will act as a bulwark against Chinese influence in Asia.
There has to be more to this, and I'll dig on that. Perhaps a per-centage of the operating profit for x number of years or the like is also involved.
Edit to Add: Here's some more background on the Japanese/Indian railway deal. I got the major players right, still intrigued by the actual financing, and whether it's anything more than a 'loss-leader':
https://www.bloomberg.com/news/arti...rain-gives-164-year-old-indian-railway-a-joltJapan’s government and its rail companies lobbied the U.S. for years to sell their bullet-train technology and found little success. Finally, there’s an international buyer: India.
The South Asian country is poised to become the first to import the iconic ‘Shinkansen’ bullet-train technology after Japan’s near-neighbor Taiwan, and that will be a highlight of India’s infrastructure upgrade program. The Japanese government has also agreed to fund most of the $17 billion needed for the project that will become part of Asia’s oldest railway network.
On Thursday, Prime Minister Narendra Modi and Japan’s Shinzo Abe formally kicked off a plan to build the 316-mile bullet train line -- roughly the distance between Los Angeles and San Francisco. Financing by Japan also means business farmed out to companies such as Kawasaki Heavy Industries Ltd., Hitachi Ltd. and East Japan Railway Co. and an opportunity lost for China’s CRRC Corp Ltd. and European manufacturers including Alstom SA.
For Japan, which is locked in a strategic rivalry with China for commercial contracts abroad, the Indian project marks a hard-fought victory as companies including Siemens AG, Bombardier Inc., Alstom and, lately, CRRC compete in a global market projected by BCC Research to be worth about $133 billion by 2019. After building the world’s largest high-speed network since the start of the century, covering 80 percent of its major cities, China has been raising its profile.
“The competition between China and Japan, especially in the ASEAN region, has been fairly intense and in India, there will be more competition for other phases of the bullet train project,” said Jaideep Ghosh, partner and head of transport at consultancy KPMG. “Japan has a longer history of operating the system without any fatalities. Politics and strategic considerations do play a part, but finally it is a commercial decision.”
[...continues at length and well worth reading...]
From the Financial Times, and a different interest rate quoted, still incredibly cheap, plus the the terms:
Enter: "India close to $15bn high-speed rail deal with Japan[...]The link, to be financed in part with a Japanese loan at an annual interest rate of 0.5 per cent for up to 50 years, would cut the journey time between Mumbai and Ahmedabad in Mr Modi’s home state of Gujarat from almost eight hours to two hours. “It is likely to happen; it is likely to get signed,” said an Indian official, noting that Japanese negotiators had agreed to Indian demands including the low-cost financing package. Local media on Thursday said India’s cabinet had cleared the deal. [...]
India close to $15bn high-speed rail deal with Japan" in to Google
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