Sagarmala Development Co to bail out idling cargo, Ropax vessels of IWAI

The Sagarmala Development Company Ltd will step in to help deploy some of the 24 roll-on, roll-off (Ro-Ro) as well as Ropax vessels owned by the Inland Waterways Authority of India (IWAI) that are idling due to “low economic viability”.

The Sagarmala Development Company will set up a special purpose vehicle (SPV) with a private entity for operating the vessels on the “best possible commercial terms” by relaxing the reserve price set by the IWAI for leasing the vessels, a government official said.

The Sagarmala Development Company is an entity set up by the Shipping Ministry to provide equity support for the project SPVs formed by the Ports/State governments/Central Ministries and funding window and to implement those residual projects which cannot be funded by any other mode under the Sagarmala programme.

IWAI owns 11 cargo vessels and 13 Ro-Ro and Ropax ships.

The assistance of the Sagarmala Development Company is being sought as the IWAI was facing difficulties in deploying the newly built Ro-Ro and Ropax vessels with private operators at the reserve price set by the IWAI and also with Uttar Pradesh, Jharkhand and Bihar governments.

UP, Bihar and Jharkhand governments are yet to convey their acceptance for deploying the vessels as per the memorandum of understanding (MoU) proposed by the IWAI.

Low economic viability and non-utilisation forced Adani Logistics to return two cargo vessels taken on bare boat charter basis to IWAI.

Cargo vessels MV RN Tagore, MV Lal Bahadur Shastri and MV Homi Bhabha, each of 300-tons capacity, are currently not in use because of low economic viability.

Four new Ro-Ro and Ropax vessels will be handed over to the Assam government on the basis of a memorandum of understanding (MoU) approved by the Shipping Ministry and one of them will be deployed in the Majuli island.

The Odisha government has requested for deployment of one Ropax vessel through the MoU route for tourism purpose.

Two RoPax vessels - MV Adi Shankaracharya and MV C V Raman - are proposed to be provided to the Kerala government as per an MOU to be signed between IWAI and the state government.

The four Ropax vessels to be handed over to the Assam government and the two vessels to be handed over to the Kerala government are expected to be flagged off by the Prime Minister Narendra Modi on October 31.

Besides, three cargo vessels – R N Tagore, Lal Bahadur Shastri and Homi Bhaba - may be handed over to the Shipping Corporation of India for being run by private operators. A relaxation in the reserve price for leasing the three vessels will be considered by the IWAI due to difficulties in deploying them on account of low economic viability, the government official said. Ends/