The Hindu Business Line : SKS Logistics to enter inland water transport

Mumbai, May 10 The Mumbai-based SKS Logistics, a major coastal shipping operator, plans to enter inland waterways services in a big way. SKS jointly with Inland Waterways Authority of India (IWAI) would be investing Rs 100 crore to operate 14 inland vessels in National Waterways 1 and 2 connecting Ganga and Brahmaputra.

The company is one of the first to be a part of this public-private initiative in inland water transport, Mr S.K. Shahi, Chairman and Managing Director, SKS Logistics, told Business Line. The company has entered into a shareholder agreement with IWAI to start the new venture.

SKS along with IWAI have floated two joint venture companies for operations on these waterways called Royal Logistics and SKS Waterways Ltd, according to the guidelines set by the authority.

In the 60:40 joint venture, SKS will hold 60 per cent equity and 40 per cent will be held by IWAI. The company plans to go for a 70 per cent debt and 30 per cent equity for funding the projects.

“The vessels would be of 2,000 DWT each and we are looking at Goa as a possible option to build vessels. However, the board will finalise a shipyard by the second week of May,” said Mr Shahi.

The joint venture companies will also construct a jetty at Haldia, Kolkata and Pandu in Assam, which will be useful in loading and unloading of containers and so on, he said.

The vessels will carry cargo such as petroleum products, tea, coal, cement and others. The company plans to commence operations by end of this year, Mr Shahi said, “In the first year of operation, we hope to carry one million tonne cargo which will go up to two million tonnes in subsequent years. It will generate income of more than Rs 100 crore in a year.”

LOW-COST SERVICE

Commenting on the need for developing inland waterways, Mr Shahi said it is the most economical and environment friendly means of transportation. The cost of transportation of goods by inland waters is 50 per cent lower than that through roads or railways.

SKS Logistics owns and operates 37 coastal vessels carrying four million tonnes of cargo.

IWAI undertakes projects for development and maintenance of inland water transport infrastructure on national waterways. The Authority has outlined areas where private sector players can participate for development of Inland Water Transport (IWT). They are areas of new technology and forming of joint venture companies for building inland vessels for cargo, passenger or dredgers, and river training in National Waterway 1 and 2.

Private sector involvement is also sought for container terminals, general cargo terminals, POL terminal and so on. Companies could also participate in the multi-modal transport network and wherever viable IWT corridors exist.

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