Continued Efforts: Initiatives to develop and promote IWT

Initiatives to develop and promote IWT

There have been major developments in the inland water transport (IWT) segment in the past two-three years, and these are expected to have a positive long-term impact on IWT development. The declaration of 106 waterways as national waterways (NWs) and the launch of the Jal Marg Vikas Project (JMVP) were the major initiatives taken for IWT development and improvement.

The past year was no different. In December 2017, Parliament passed the Central Road Fund [CRF] Amendment Bill, 2017, to allocate 2.5 per cent of the proceeds of the CRF towards the development and maintenance of NWs. The proposal for this was submitted jointly by the Ministry of Shipping and the Ministry of Road Transport and Highways, with the cabinet giving its approval in May 2017. An allocation of 2.5 per cent of CRF proceeds will generate approximately Rs 20 billion per annum for the development and maintenance of NWs at existing rates of duties levied for the CRF.

In July 2017, the cabinet approved the revalidation of permission to raise extra-budgetary resources to the tune of Rs 10 billion as Government of India bonds by the Inland Waterways Authority of India (IWAI) during 2017-18. The bonds were issued in two tranches of Rs 6.6 billion and Rs 3.4 billion. The proceeds from the bonds will be utilised by IWAI for the development and maintenance of NWs under the National Waterways Act, 2016.

Jal Marg Vikas Project

A major ongoing project in the segment is the JMVP for the development of NW-1. The project involves the development of the stretch between Allahabad and Haldia on the Ganga river, ensuring a minimum depth of 3 metres for enabling the commercial navigation of at least 1,500 tonne vessels.

The project aims to provide an environment friendly, fuel-efficient and cost-effective alternative mode of transportation, especially for bulk goods, hazardous goods and over-dimensional cargo on NW-1. Involving an investment of Rs 53.69 billion, the project is being undertaken with technical and financial assistance of the World Bank.

In February 2018, the central government and the World Bank signed a $375 million loan agreement to develop India’s first modern IWT fairway on the Ganga river between Varanasi and Haldia port.

Indo-Bangladesh protocol

The Inland Water Transit and Trade Protocol between India and Bangladesh allows inland vessels of one country to transit through specified routes of the other country. The two countries have commenced transshipment operations under protocol. The maiden vessel reached Ashuganj port on July 16, 2016. The goods were then transshipped to Tripura. Cargo vessel movement using internal river ports commenced between India and Bangladesh on February 17, 2017. The first cargo vessel, Shonartori Nou Kalyan-1, arrived at Dhaka’s Pangaon inland container terminal at Keranigan from Kolkata on February 17, 2017 with 65 containers on board. In April 2017, the cabinet approved the MoU between India and Bangladesh for fairway development of the Ashuganj-Zakiganj stretch on the Kushiyara river and the Sirajganj-Daikhawa stretch on the Jamuna river on the Indo-Bangladesh protocol route.

The traffic carried on the Indo-Bangladesh protocol route increased from 2.27 million tonnes (mt) in 2015-16 to 2.58 mt in 2016-17, registering a year-on-year growth of 13.56 per cent. Besides, cargo traffic carried on the route increased at a CAGR of 11.05 per cent during 2012-17. The main commodities carried on the route are fly ash, salt in bulk, rice, wheat, petroleum, oil and lubricants, coal, slag, gypsum, edible oil, iron ingots, cement, cement clinker and dolomite powder.

There is a new proposal to dredge the Ashuganj-Zakiganj/Karimganj stretches on the Kushiyara river and the Sirajganj-Daikhawa stretch on the Jamuna river on the Protocol on Inland Water Transit and Trade Route. Funding will be provided in a ratio of 80:20 by India and Bangladesh. The Indian share of the project is being funded by the Ministry of External Affairs.

The way forward

Besides cargo transportation, the IWAI is exploring new areas of revenue generation such as tourism, cruise operations and water sports, which are also expected to enhance river connectivity to various remote villages by providing better and safer navigation. The authority is also planning to involve banks for ensuring the availability of financing options for private players in the segment.

The IWAI also looking to equip, operate and manage some of its terminals through the supply/equip-operate-manage (SOM) model, which envisages equipping, operating and managing of terminals by a private terminal operator through a revenue sharing model. The IWAI has decided to offer the following terminals through the SOM mode for operation and management on a lease period of 30 years on a revenue sharing basis – Garden Reach jetty in Kolkata, and Gaighat and Kalughat in Patna on NW-1.

Meanwhile, several production and demand centres in the country lie close to the coastline and rivers, yet the waterways are underutilised, highlighting significant potential for moving raw materials and finished products between these centres using inland waterways. These commodities include coal and liquefied natural gas, and roll-on roll-off (ro-ro) cargo. Once these plans take concrete shape, the IWT segment is bound to get a further impetus.