Japanese loans is undoubtedly the cheapest- 0.1% rate of interest, 15 year moratorium in payback and payback period of 50 years. But there are some catches:
(1) It has to be paid in Japanese currency Yen. If Japanese currency appreciated w.r.t. Indian Rupee it will be a loss to India, and conversely if it depreciates, then the rate of interest may be negative in terms of rupees. The annual interest burden for 88000 crore loan shall be only 88 crore Rs if Y-Re conversion remain same.
(2) About 30% of the procurements have...
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to be made from Japan. This may increase the cost of project. The similar HST may be available if global tenders are floated, the competition with European & Chinese HST manufacturers may result in lower costs.
(3) Provisions for Transfer of technology are not very clear. Unless a high level of indigenisation is achieved, the cost of track/train spares and rakes shall financially bleed the HST
(4) HST is a double edged sword for India, if the projects is timely implemented within the projected costs, Technology for construction/ operation/maintenance of tracks & trains are absorbed and implemented well, Train composition, coach layout, fare structure etc are innovatively handled to optimally reduce the keep cost per seat, there are high chances that HST may turn out to be a boon for India. Else the results shall be opposite.