VD as a rpg game developer yourself, could you answer my questions if you have time?
Certainly. Keep in mind, that I'm not a professional developer and my own experience doesn't really mean anything. My opinion is based on Tim Cain's quote (he said that it takes at least 3 years to make a full-scale RPG), personal observations (the only decent RPGs that were done in 18 months were straight sequels using existing engines, systems, and assets), and Fargo's track record (2 years for Bard's Tales, 18 months for Hunted).
Maybe Fargo will surprise us and I certainly hope that he will somehow, but Science! teaches us not to put out faith in miracles.
What part of developement process consumes the most time?
I'd say iterations, i.e. the process of turning mediocre into good.
How long would it take to test their games to make it nearly bug free after finishing the alpha?
No idea. Depends on the level of complexity, different paths, choices and consequences - something we know little about. Besides, there could be several different scenarios. Let's say people test and say OMG! It's heavan! Then it's just bug-fixing, which can be done relatively fast. Alternately, people may say 'feature X sucks' (see the reaction to the inventory screen) and this reaction would push InXile to make changes. Then it's a much longer haul.
From what i see, they made their own engine. How long would that take for a TB games?
No. They are working with Unity. The last game that used Unity was Conquistadors, if you need a reference. Overall, Unity's good at getting things to a playable stage fast, but playable and fully working are two different things. Still, I don't think that Unity will hold them back.
I remember older game developers taking 3-4 years for making games so is there new technological advances that reduced speed of making games since then?
There are better tools, so you can make a shitty game faster, but quality, in my humble opinion, always takes time.