Views of Pravir Pandey

”IWAI uses innovative technologies to enhance overall performance”

The development of inland waterways has attracted a lot of attention in the past few years, with its modal share increasing to 2 per cent after stagnating and hovering around 1 per cent for several decades. While the modal share of inland waterways in India is expected to touch the 6 per cent mark by 2025, it still lags behind global counterparts such as Germany, China and Vietnam, which have shares in excess of 10-15 per cent. At the 18th edition of the “Ports in India” conference, Pravir Pandey, vice-chairman, Inland Waterways Authority of India (IWAI), talked about the organisation’s experience so far, the current scenario with regard to the movement of goods through inland waterways, the key issues and the future potential. Excerpts…

Since 2014, the IWAI has been working towards accelerating the development and use of inland waterways in the country. Owing to its natural endowment, India has the potential to operate 111 national waterways totalling a length of 20,236 km comprising rivers, backwaters, creeks and canals. Currently, there are 16 operational waterways in the country with 22 more waterways expected to be operational by 2030. Due to sustained efforts by the IWAI, there has been a remarkable increase in traffic on operational waterways, further solidifying their underlying potential. This traffic is expected to grow to nearly 120 mtpa by 2025.

Strength, opportunities and threats

Inland waterways in India have certain inherent advantages. These channels are environment friendly and require a much lower investment to develop due to the presence of a natural route compared to other forms of modal transport. These channels can also be developed faster than land routes due to the small amount of land required. These channels can help alleviate the load on the existing land network and decongest highways throughout the country. Another benefit of developing inland waterways is that they can connect different regions into a cohesive economic unit; this will fast-track the development of the respective regions.

A threat to the development of these channels is the absence of a conducive policy framework. Another regulatory problem faced by the IWAI is the lack of coordination between the central government, the state government and the private sector regarding project implementation. Apart from regulatory challenges, there are certain developmental and technical challenges. Due to lack of interest in the development of major rivers, India is facing a riverine silt crisis with a large accumulation of silt in these waterbodies, which hinders the entry of transport vehicles into the river, thus preventing the development of large inland waterways. For instance, the river Ganga gets nearly 250 mtpa of silt and about 20 per cent of it is retained in the river. Due to the negligible interest shown in the previous years towards the development of inland waterways, the silt level in the river Ganga has reached extremely high levels. Thus, innovative means have to be employed (apart from dredging) to ensure that the IWAI can achieve a 3 metre silt-free depth and a 45 metre bottom width channel to enable the passage of a 1,500-2,000 tonne vessel.

Banking on technology

The IWAI constantly uses innovative technology to improve the overall performance of the IWT sector. One such platform is the Portal for Asset and Navigational Information (PANI). PANI is a river navigation system, that can be accessed easily through mobile- and web-based portals, and will aid in the uploading and dissemination of information. The platform includes a voyage planner module that assists stakeholders in identifying key assets and navigational information, and estimating least acceptable depth (LAD). Another new product is CarD (Cargo Data), a portal for the collection, compilation, analysis and dissemination of all cargo and cruise movement data. It provides month- and year-wise comparison of traffic at all national waterways. It also provides jetty-wise traffic share, major commodity share in national waterways, month-wise cruise km on national waterways, shipper-wise commodity share, operator-wise commodity share and month-wise cruise passenger traffic on national waterways.

Further, there are platforms that convey real-time information to users such as the River Information System, which provides real-time vessel tracking and routing by capturing data points such as water depth, bends and river width. The Least Available Depth Information System (LADIS) is another application which ensures that real-time data on LAD is disseminated among shippers and cargo owners. Further, to ensure transparency and efficiency, the IWAI is using a vessel and crew registration system called JalVahan. This system acts as a central repository for all vessel and crew details, and provides information to requestors in real time. The authority has created a dedicated freight management system (FMS), which will help terminal operators, vessel operators and cargo owners in managing the cargo movement on national waterways. It will be integrated with PCS and will allow seamless collection of data at source, generating insights from the same. Some other innovative technological interventions in the IWT sector include the use of innovative vessel designs (such as low draft IWT vessel designs with high efficiency), bottom panelling technique for river training and green terminal buildings.

Vision to success

The IWAI’s five-year vision is to develop a self-sustainable, economical, safe and environment-friendly supplementary mode of transport for the overall economic growth of the country. It expects to increase the modal share of IWT from the current 2 per cent to 2.5 per cent, develop 5,000 km of IWT routes across states, enhance regional connectivity with Northeast India and neighbouring countries such as Bangladesh, Nepal, Bhutan and Myanmar through the Eastern Waterways Connectivity Transport Grid project, and integrate IWT with coastal shipping. To this end, the IWAI has proposed steps such as the creation of a digitalised integrated platform for the dissemination of information, the revalidation of DPRs that are over 10 years old, the revival/operationalisation of obsolete jetties to attract private sector participation, the identification of short distance water transport corridors, the monetisation of smaller floating jetties through manning contracts, integration with the coastline to benefit from port-led development, enhancement of the commodity mix in the IWT sector to include coal, foodgrains and LPG, and the provision of a moratorium on the levy and collection of waterway usage charges for an initial period of three years to attract more investment in the sector.

In the absence of long-term financing options, attracting private investment in vessels is going to be challenging as the return on investment is expected to occur over a long period of time. Thus, there is a need to relax certain financial constraints present in the sector. First, there needs to be an extension of benefits under the Tonnage Tax Scheme to inland vessels; this tax benefit under section 33 of the Income Tax Act allowed public companies to deduct up to 100 per cent from the P&L account and utilise it for ship acquisition within eight years. The act is currently applicable to ships registered under the Merchant Shipping Act, 1958 and should be extended to cover ships registered under the Inland Vessels Act, 1917. Second, currently most ship acquisitions are done through banking channels vis-à-vis bonds, which can have a longer duration and are used extensively around the globe. Due to this, foreign vessels can avail of a loan for 15 years, while Indian vessel owners get loans for 6-8 years at best. Thus, there is a need to create a riverine development fund to provide longer tenor loans at lower costs. Third, there is a need to create a financial assistance policy in order to promote shipbuilding in India. Such policies can be exclusively for new build barges/IV vessels proposed to be deployed in national waterways for the movement of cargoes and passengers. Last but not least, a key challenge for the lender in ship financing is the drop in valuations that takes place if the ship does not get suitable business. Thus, to protect banks, ships can be owned by a special purpose vehicle that can also be leased across the globe.

Going forward, the IWT sector will need policy clarity and complete coordination at all levels of the government in order to fully realise its potential and integrate with the rest of the Indian economy. Historically, the sector was a bulwark of Indian prosperity and even today it has the capability of giving generous dividends if developed properly.

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