Inland waterways - developing an alternate mode of transportation. This is a major big bang reform by Narendra Modi Government and specially Nitin Gadkari.
What is Inland Waterways Project ?
Within the scope of 14,500km navigable inland waterways, 5 National Waterways (NWs) - NWs 1, 2, 3, 4 and 5 - spanning approximately 4,400km have been outlined as potential inland waterways, which are the Ganges river, the Brahmaputra river, the West Coast Canal, Godavari and Krishna river, and the East Coast Canal, respectively. Also proposed is NW 6, which stretches along 121km of the Barak river.
Inland waterways account for only 3 per cent of India’s total transport, compared with 47 per cent in China and 44 per cent in the European Union.
Purpose of Inland waterways
Developing Inland Waterways Transport (IWT) to help enhance an alternative mode for transportation of goods, to decongest existing models as well as realising advantages in terms of fuel and cost savings.
The proposed 101 inland waterways would require an estimated investment of USD5.5 billion over the next 2 years.
Steps taken so far by Narendra Modi Government
- The Union Cabinet has decided to approve 101 additional inland waterways as NW for navigation.
- IWT has its advantage over road and rail, especially for bulk transportation (coal and cement) and over dimension cargo. The following are among some flagship examples that employ IWT as a cost-effective transport option:
- Food grains from Kolkata to Tripura via Ashuganj and within Assam
- Transportation of coal for National Thermal Power Station (NTPC) - Farakka project
- Transportation of fly ash from West Bengal to Bangladesh
- Hot-rolled (HR) coils from Kolkata to Tripura via Ashuganj
- According to the Inland Waterways Authority of India (IWAI), 16 waterway projects have already been completed at a cost of USD2.3 million.
- Construction of 17-metre-long floating terminals has been completed at 20 places on the Brahmaputra river. Further such projects have been initiated at 15 places by the Assam government, scheduled to be completed by December 2016.
- India and Bangladesh inked an agreement on coastal shipping for two-way trade through ports in June 2015, renewing the 1972 Protocol on Inland Waterways Transit and Trade (PIWTT) for using their waterways for commerce.
- The Kaladan Multi-Modal Transit Transport Project was jointly identified by India and Myanmar to create multi-modal transport for shipment of cargo between the nations. The project includes construction of an integrated port and inland water transport (IWT) terminal, development of a navigational channel, and construction of a highway transhipment terminal.
Expected next steps by Narendra Modi Government
Infrastructure and capacity
- Incentives to develop additional smaller berths for domestic cargo ships (which use 55 per cent of total voyage time in port delays) at ports
- Increasing vessel capacity
- Domestic cargo corridors for first and last mile connectivity with ports.
Policy initiatives by Narendra Modi Government
- Co-loading of domestic and EXIM cargo is expected on coastal vessels; while co-loading is already allowed for Indian flag vessels, decision is awaited for foreign flag vessels.
- Policies around subsidies for capital investments in coastal shipping could be revisited, similar to roads, rails and air sectors.
- IWT governance could be centralised under a single body (e.g. IWAI), which is, at present, carried out under multiple authorities such as CIWTC, port authorities and state governments.
Impact of Inland Waterways Project
- Developments in power projects in the north eastern region are expected to generate cargo movements of about 50 to100 million metric tonnes over a period of 20 years, where IWT could complement the cargo transportation needs.
- Domestic shipping is advantageous over road and rail transport, as fuel consumption for every tonne–km of freight shipped is only 15 per cent and 54 per cent of fuel consumed by road and by rail, respectively, with comparable less emissions.
- For bulky consignments, coast-to-coast and inland carriage of goods by shipping costs merely 21 per cent and 42 per cent by road and by rail, respectively.
Business opportunities due to Inland Waterways
- Several investments would be channelised towards infrastructure development.
- NW 4 and NW 5 would span 1,078km and 588km, respectively, and are expected to be developed at approximately USD1 billion and USD2.7 billion, respectively; commercially viable stretches would be developed through the PPP route.
- Specialised modernisation and technological knowledge would be significant considerations for the participating companies.