Narendra Modi govt does well with its inland waterway move, but infrastructure is a challenge

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Published: September 19, 2016 6:05:55 AM

The government has done well to focus on inland waterways to move freight, but building infrastructure for the purpose is a challenge

The move by car-makers to use water transport is significant since it unlocks potential for cost savings as well as the possibility of moving various unconventional cargo. The move by car-makers to use water transport is significant since it unlocks potential for cost savings as well as the possibility of moving various unconventional cargo.

The facts are clear in their verdict: in terms of fuel efficiency, a litre of fuel can move 24 tonne km (TKM) by road, 85 TKM by rail and 105 TKM by inland water transport (IWT). And a single unit of horsepower can move about 150 kg on road, 500 kg by rail and 4,000 kg by IWT. Yet coastal shipping and inland waterways account for a mere 6% of the country’s transport modal mix, as against 24% in China and 32% in neighbouring Bangladesh.

This is a pity considering that India has a coastline of 7,500 km and inland waterways of more than 14,500 km. To set aright this skewed ratio, the Union government has unveiled a host of steps in recent times, with the overall objective of increasing the modal share of coastal shipping and inland waterways to 10% by 2020. The recent decision to double the discount given for vessel-related charges to roll-on-roll-off (Ro-Ro) ships—that ferry cars and trucks along the coast—to 80% from 40% was one such move. It came after a shipper shut operations citing high marine charges, having transported a batch of Hyundai cars on special category Pure-Car-Truck-Carrier (PCTC) vessels—800 Hyundai cars had been moved on the coastal route from Chennai to Pipavav Port in Gujarat in February. The shipper recovered only 40% of the cost.

Since then, Maruti has also taken to the water, but via the inland waterways route. In August, as part of a pilot project, it transported 24 cars (see photo) to Kolkata from Varanasi on the river Ganges, (National Waterway I) after signing a memorandum of understanding with the Inland Waterways Authority of India (IWAI). Reportedly, Hyundai has since approached IWAI to transport cars via the inland waterway route.

The move by car-makers to use water transport is significant since it unlocks potential for cost savings as well as the possibility of moving various unconventional cargo. Bulk and break-bulk cargo have been moved on water for decades but creating a whole new infrastructure system comprising terminal jetties, storage facilities, push-towing techniques, and modernised cargo handling can provide a fillip to the economy.

“The country today needs port and waterway infrastructure that will enable the reduction in the overall cost of logistics that is being envisaged, to 12% from 18% at present,” says Alok Deora, analyst at IIFL Research. “The R800 crore set aside for ports and inland waterways in this year’s Union Budget appears below the potential of this sector,” he adds. Significantly, Parliament passed the Inland Waterways Bill in March this year, adding 106 inland waterways to the five National Waterways (NWs).

Thus far, IWAI has initiated and completed a number of projects. More than 11 terminals have been constructed on National Waterway (NW) 3, the smallest of the five NWs, which is confined to the state of Kerala. This waterway is linked to the port at Cochin and can offer a cost-effective solution for foreign trade. Being the smallest and the least problematic, unlike those on rivers Ganges and Brahmaputra (both of which have high level of silt), the development of this waterway is almost complete.

graph infra 2

The biggest NWs, NW1 (Ganges) and NW 2 (Brahmaputra), are partially developed at present. The ongoing R4,200-crore World Bank project on NW 1 envisages construction of six fixed terminals and the IWAI is busy tying up business as it expects more cargo to gradually shift onto this waterway. A number of projects are also ongoing on the Brahmaputra. Various other waterways have been identified for development throughout the country. The states of Andhra Pradesh and Goa seem to be taking the lead in developing river infrastructure, having signed memoranda to this effect with IWAI.

Amitabh Verma, Chairman, IWAI, agrees that large sums of money would be required to build the infrastructure the government has in mind. “This year, we have R1,325 crore and next year, the requirement would be of R2,500-3,000 crore. The requirement will suddenly jump after that and we need to tie up these funds by then,” he tells FE.

With increasing movement of cargo, the country uses many items that are best suited for water transport—bulk cargo such as coal, ores, fly-ash, building materials, cement and over-dimensional cargo. A big river vessel or a push barge can easily replace at least a few hundred trucks. Barges are also more environment-friendly, causing less air and sound pollution. Further, IWT is less capital intensive vis-a-vis other modes of transport. But the creation of a sustainable, eco-friendly water transport system is a long-term affair and the experience of China and Europe shows the importance of port infrastructure for the development of inland waterways.

graph infra

“If you look at it as a 100-metre race, roads and rail are already about 40 m ahead, and they continue to receive more funds. You can’t expect all the cargo to shift onto waterways overnight,” says Verma.

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