NEW DELHI (TIP): The bullet train accident in China four years ago along with low-cost finance and a promise to have a substantial ‘Make in India‘ component and transfer of technology clinched the deal for Japan to build the first high-speed train that will run between Mumbai and Ahmedabad —with the possibility of extending it to Delhi in future.

The Rs 98,000 crore project was cleared by the cabinet on Wednesday evening and is set to be announced during Japanese premier Shinzo Abe’s visit later this week.

Sources said that a committee headed by NITI Aayog vice-chairman Arvind Panagariya has said that the Shinkansen System had the best safety record with no fatalities in addition to the fact that delays on a trip did not exceed a minute.

Design flaws and weak management are said to have caused a crash in the south-eastern city of Wenzhou in which 40 died and close to 200 were injured. China was keen on funding and building the country’s first bullet train as it sought to enhance its railway footprint across the globe.

But there is still chance for others. Although Japan is keen to fund other similar projects, the government has kept the window open to partner with other countries, sources said.

In the coming years, up to 70-80% of the components could be manufactured in India. The Japanese government has offered technical support and was willing to drive the local manufacturing and technology transfer initiative within a specified period, said sources. In addition, it has offered funding at 0.1%, compared to the 0.3% cap decided by India recently, with the tenure of the loan at 50 years, along with a 10-15 year moratorium. Of the total project cost, around Rs 17,000-18,000 crore would be the cost of land.