Still sailing

Inland water transport is an idea whose time has come. For too long it has been the step-child of planners and policy makers in the transport field.

With the current government leaving the ghost of UPA II behind, the recent decision to implement ´Jal Marg Vikas´ by 2020 would enable movement of large cruise vessels through the year up to Allahabad.

Prima-facie, though IWT looks like a feasible proposition, the same has been mired with impediments such as illegal encroachments, low height river bridges, fishing activities, illegal sand mining activities and most importantly shallow draft.

It has been universally accepted that Indian rivers do not have the minimum required draft in six envisaged national waterways (NWs), and even if they have, maritime experts are not sure whether the draft has been maintained constantly for the proposed stretch or not.

Says MP Pinto, Former Secretary, Ministry of Shipping, Government of India, ´To make inland waterway projects successful, it is necessary for the gov¡ernment to undertake constant capital and maintenance dredging to maintain the draft of 2.5 meters.´

To this, Vivek Arya, Managing Director of Rhenus Logistics India (P) Ltd says, ´The rivers in India are highly dependent on the monsoon for the required water level. Hence, to make it successful, India needs to connect the rivers, which will minimise the chances of low level of waters.´

Inter-connectivity
Another suggestion which has come up while interacting with maritime experts is connectivity with the ports (major and minor). In Europe and China, the waterways are connected to major or minor ports, which makes the entire logistics operations cost effective. For that matter, India needs an integrated transport system with hinterland connectivity.

However, in India, connecting waterways with ports seems to be a costly affair. Coastal vessels find it extremely difficult to use large ports. Such ports are usually expensive, congested and priority is invariably given to larger, international vessels. Most important of all, such ports come under the jurisdiction of the Customs department and coastal vessels find it extraordinarily difficult to persuade officials that their writ does not cover coastal shipping. There is a huge amount of paperwork that must be gone through before coastal or inland vessels can move out of these ports and this only adds to transactional costs.

Tepid response
Last year when the Inland Waterways Authority of India (IWAI) called for an expression of interest for the development of infrastructure on the National Waterway -2, it turned out to be a dull affair. Interestingly, knowing the fact that project proposition for national waterways is not attractive, the authority has also called for expressions of interest (EoI) for the transportation of 0.5 mmtpa imported coal for Bongaingaon TPS in Assam by IWT mode.

´IWAI intends to develop Inland Waterway terminal at Jogighopa on (NW-2) on 25 acres of land which is already under possession of IWAI,´ says MK Saha, Director (Traffic), IWAI. He adds, ´The proposed terminal will act as an aggregation and distribution centre for the entire North-Eastern region.´ However, Saha was reluctant to divulge the entire cost of the project.

It is worth mentioning that since NTPC is setting-up 3×250 MW Bongaigaon TPP at Assam, the power generation company chose to transport the required 0.5 mmtpa imported coal through an inland water route.

As per EoI documents, the project will have components such as IWT jetties for handling coal and other general cargo, pipe conveyor belt with a proposed discharge capacity of 200 mt/hr from the unloading point at Jogighopa terminal for transferring of imported coal from the jetty to silo system for storage, crane and hoppers with a proposed discharge capacity of 200 mt/hr, silo system with a capacity of 4,000 mt for storage of imported coal from where the coal will be loaded through rapid loading system into the wagons, etc.

When asked about the responses for EoI, a senior official from IWAI says, ´We have not received encouraging responses for the recent EoIs. In fact, we may extend the deadline for NW-2.´

In the meantime, many in the maritime industry observe that the initiatives have come into the picture rather late and IWT has been underutilised over the year. For example, one barge equals 15 rail wagons and 60 trucks. According to K Ravichandran, Vice President, ICRA, the reluctance on taking up any IWT project by private investors is mainly due to lack of available infrastructure and ports not giving enough space for berths. ´Poor draft at the ports, inadequate infrastructure at cargo loading and unloading points and poor connectivity has kept the private investors off the radar.´

According to MP Pinto, policy initiatives have been a little askew in the field of incentives. So far the emphasis has been mainly on supply side incentives. ´We give sops to owners of inland vessels in the form of concessions in terminal charges or light dues, etc,´ he says.

Ravichandran adds, ´Even the government (in the past) is equally responsible for not providing adequate funds for the announced five National Waterways.´ A case in point would be Odisha. Despite being declared a National Waterway by the Government of India on November 25, 2008, Odisha did not receive any funding from the Centre under the 11th Plan. This has resulted in the Odisha government preparing a new detailed project report for the Rs 5,000 crore NW-5, a mega inland water transport project along the east coast canal and Brahmani-Kharsua river system (see box).

However, on a positive note, since January 2013, the previous government has identified and fast-tracked the implementation of key projects in the NW – 1, 2 and 3. These are the Varanasi-Haldia stretch of the Ganga (NW-1), the Brahmaputra in Assam (NW-2) and the inland stretch in Kerala (NW-3). Following a push by the PMO, IWAI has since moved forward on large scale private investments to transport coal and fertiliser on NW-1, foodgrains and coal on NW-2 and a lot of cargo on NW-3. In fact, the IWAI had been making concerted efforts to attract private sector investment in the IWT sector through the Joint Venture route.

However, except NTPC, there are no other major PSU or private players using this mode of transport. ´What we need is more government support and PSUs to use this mode of transport and show its benefits before private players infuse its funds,´ said an industry expert.

Meanwhile, IWAI has informed Infrastructure Today that Indian Farmers Fertiliser Corporation (IFFCO) and Tata Chemicals (TCL) to transport fertiliser via IWT which will provide a push in a big way. According to IWAI, both companies will do the trial run on NW-1 to transport fertiliser from their manufacturing plants in Phulpur and Haldia. The trial run will ascertain the viability of the movement of fertilisers through NW-1.

IWAI has also called for EoIs for transportation of an estimated 3 mn t of imported coal annually along the Sandheads (mouth of the Hooghly river) – Barh (Bihar) stretch of the NW-1. It will be transported through the route for NTPC´s 3,300 MW Barh power plant.

The Farakka coal transportation project, being implemented by Jindal ITF, is believed to be in an advanced stage. ´Barring unforeseen developments, the barge movement of imported coal for the Farakka plant should start in the first quarter of 2013,´ said a senior official from IWAI on the basis of anonymity.

The total cost of the Barh coal transportation project is estimated at Rs 1,100 crore against Rs 650 crore for the Farakka coal transportation project. It is due to be commissioned in 2013.

– Rahul Kamat

Private investment opportunities

Factors affecting diversion of IWT
1.Type of commodity (Bulk/Break Bulk/Container/Non-Perishable)
2.Volumes to be handled
3.Actual place of origin/destination within the region
4.Long Term & Firm Commitment of Traffic
5.Distance from proposed/identified IWT terminal
6.Existing Modal Choice (Rail/Road)
7.Port – IWT Connectivity
8.Comparative Intermodal distance
9.IWT Trip (O-D) Distance (Km)
10.Empty Return Ratio
11.Number of users at the terminal (captive or multipurpose)
12.Deep sea transshipment, wherever feasible

Odisha signs MOU with IWAI
The State government of Odisha has signed a memorandum of understanding (MoU) with the Centre´s Inland Waterways Authority of India (IWAI) and other stakeholders including Paradip Port Trust (PPT) and Dhamara Port Company Limited (DPCL). The signing of the MoU would thus implement development of National Waterway No 5, a 333 km stretch of waterways in the State at an estimated cost of about Rs 2,000 crore to be completed within three years. The objective of developing the waterway is primarily to connect Paradip and Dhamara ports with industries of Kalinganagar and Talcher and also mines for transportation of cargo like iron ore, coal, coke, steel pallets, bauxite, aluminium ingot, fertiliser, cement etc. As per the MoU´s condition, the land to be required for these projects will be provided by the State government free of cost. IWAI will develop a fairway for movement of cargo vessels of maximum 1500 tonnes capacities with installation of navigational aids. The State government and PPT & DPCL may form a SPV or JV to develop facilities of handling bulk and general cargo at Paradip, Pankopal and at Dhamra. Besides, IWAI will develop one floating jetty at Jokadia.

INVESTMENT IN NATIONAL WATERWAYS (in crore)

IDENTIFIED POTENTIAL IWT TERMINALS