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Although a policy on effectively utilising inland waterways for transport has been there for over a decade, the sector has not attracted any major investments under the public-private partnership route.
A recent Government press release saying that a panel has been formed to look into ways of scaling up investments under the PPP mode, however, offers a ray of hope for the sector — touted as an inexpensive and efficient mode of transport.
Countries such as Bangladesh, Germany, the US and China have demonstrated the success of inland waterways transport, yet it continues to be grossly under-utilised in India.
Bangladesh, for instance, transports nearly 30 per cent of its goods via inland waterways ; in Germany, it is nearly 20 per cent while in the US, it is roughly 14 per cent.
Despite India having inland waterways with a navigable length of 14,500 km, only a third of it is being used for navigation by mechanised vessels. In India, only 0.15 per cent of domestic surface transport is done through this route. Roads and railways continue to be the bulk carriers .
New panel
A decade ago, it was estimated that the potential for cargo movement by the declared National Waterways, such as the Ganga, was estimated to be 50 billion tonne km. Even a shift of one billion tonne km to inland waterways will reduce fuel cost by about Rs 25 crore and the cost of transportation by about Rs 45 crore.
According to the Government, the new committee will be headed by the Secretary to the Planning Commission, and will have as members the Shipping Secretary, the Director-General of Inland Waterways Authority of India (IWAI), and a representative of the Department of Economic Affairs.
The panel will identify new areas for private investment, both in infrastructure and in transportation, and identify multiple business models. This will be supplemented by designing Model Concession Agreements and other standardised documents to facilitate the rapid scaling up of investment.
The Prime Minister’s Office has identified and fast-tracked implementation of the Varanasi-Haldia stretch of the Ganga, the Brahmaputra in Assam and the inland stretch in Kerala. The Authority has moved forward on large scale private investments to transport coal and fertiliser, food grains and coal on some of these stretches.
Mr K. Ravichandran, Senior Vice-President, ICRA Ltd, says the advantages of IWT are well documented. This includes fuel efficiency, being environment friendly and cost effectiveness in transporting over dimensional cargo, hazardous and bulk goods. However, it has not taken off in India yet and is believed to constitute less than 0.5 per cent of tonne-km transported in India.
To make the shift to IWT attractive, a fair amount of viability gap funding might be required as the bidders may not show as much enthusiasm to bid for projects as they usually do for port sector projects, which has reasonable infrastructure and cargo visibility already in place.
Moreover, some amount of subsidy for the vessels may be provided so that smaller entrepreneurs can participate in the development process, he said.
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