The Hindu Business Line : Funding inland water transportation

A barge loaded with liquid ammonia gas sails through an inland waterway near Kochi... The Shipping Ministry's efforts to source fresh funding to develop the country's inland water transport system assume significance as such a system will play a key role in the Sagar Mala project.

AS PART of its efforts to develop the inland water transportation (IWT) system, the Ministry of Shipping and the Inland Waterways Authority of India (IWAI) are exploring new sources of external funding, especially after the Asian Development Bank recently agreed in principle to provide a loan of $300 million for IWT development.

These efforts assume significance in the light of the increased role that inland water transportation will have to play for the implementation of the ambitious Sagar Mala programme.

The ADB's interest in IWT development is being seen as a recognition of the potential of this sector and may whip up fresh interest in the international money market. "In fact, as a first step, the ADB has started to undertake studies on the IWT status and potential through a Canadian consultant towards 2003-end.

For the study, the ADB has approved technical assistance grant of $90,000. We are confident that we can mop up external funding for IWT development in India," according to an IWAI official.

If the Shipping Ministry notches up success in giving the much-deserved push to this sector, it would doubtless mark a significant development for India's transportation sector. This is in the light of the fact that inland water transportation had not got the priority it deserves all these years, resulting in its "steady degeneration".

Pointed out an industry analyst: "Due to increase in population along waterways, deforestation, construction of cross-structure like bridges and other reasons, many waterways that were earlier navigable have today become defunct and unusable for transportation.

Industrial centres, which were located in the vicinity of waterways and had been depending on this mode of transportation, also shifted away, thus reducing the demand for IWT."

Although India has about 15,000 km of navigable waterways, consisting of a variety of river systems, canals and backwaters, the cargo movement through these waterways is insignificant. Against the 1,000-billion-tonne-km done by the combined transportation systems, the annual cargo moved by IWT is only 17 million tonnes, corresponding to 1.5-billion-tonne-km, with the balance being served by road and rail.

The productivity levels in India in this context are also poor — against 15,000 tonne-km per tonne done by IWT cargo vessels in the US and 10,000 tonne-km per tonne in China, the productivity level of Indian vessels is below 5,000 tonne-km per tonne. The Indian IWT fleet comprises of about 250 cargo vessels. However, the growth projections in the Sagar Mala programme indicate that IWT will be playing a significant role in the near future, with the share of this mode of transportation expected to go up to 20-billion-tonne-km by 2010, for which at least 2,500 vessels would be required.

Further, with the development of IWT infrastructure under the Sagar Mala, productivity of IWT vessels will have to touch the 10,000 tonne-km per tonne mark.

As a run-up to the full-fledged development of inland water ways, as envisioned in the Sagar Mala concept, IWAI will be taking up six projects related to development of varying stretches of waterways on the Ganga and Brahmaputra for cargo movement through private participation.

The IWAI has already identified the six stretches of waterways to be developed on the basis of the potential they have to attract cargo — out of these six projects, one is along National Waterway-1 originating from Kolkata, four on NW-2 in Assam and one on NW-3 in Kerala.

The IWAI had hired IFCI as a consultant to identify potential navigable stretches for cargo movement along the 15,000-km stretch of river length India had. "The consultant had submitted its report some time back, identifying 27 projects — 15 related to cargo transportation and seven related to setting up of terminals. And out of these 27, we have short-listed the six for immediate implementation," an IWAI official said.

The IWAI has also initiated a string of development projects like setting up of fairway, terminals and navigational aids, along the three waterways that so far have been declared as National Waterways.

On the NW-1, which covers a distance of 1,620 km on the Ganga from Haldia to Allahabad, an LAD of 2 mts is being provided between Haldia and Patna for a distance of 1,020 km for about 330 days a year.

Having provided floating terminal facilities at Haldia, Karagola, Bhagalpur, Munger, Patna, Varnasi, Chunar and Allahabad, the IWAI is now setting up a permanent terminal at Gaighat, apart from providing night navigation facilities between Kolkata and Farakka.

A scheme for procurement of two cutter0suction dredgers for NW1 is also under implementation.

On the NW-2, which covers a distance of 891 km from Sadiya to Dhubri on the Brahmaputra, a 2 mt LAD has been provided between Dhubri and Neemati, spanning a length of 630 km — this is now being extended to Dibrugarh for a total distance of 768 km.

While a permanent terminal is being set up at Pandu and night navigation facilities provided between Dhubri and Guwahati, construction of a cutter suction dredger is underway.

Industry analysts however feel that for overall development of IWT, it is necessary that State Government develop their respective waterways, especially with the Centre introducing a scheme envisaging loan assistance up to 50 per cent of cost of the scheme on re-imbursement basis to the State Government for any such projects.

According to an industry observer, "Considering the financial constraints facing the States, this scheme has now been revised so as to provide assistance in the form of grant to the North-East States up to 100 per cent and to other States up to 90 per cent. The response (to the revised scheme) has been encouraging."