BARGING ON INLAND WATERWAYS
Other Countries - INDIA
Map of India showing current and proposed waterways
INLAND WATERWAYS SYSTEM
The Ganga between Allahabad - Haldia (1620 km) the Sadiya-Dhubri stretch of river Brahmaputra (891 km) and the Kollam - Kottapuram stretch of West Coast Canal along with Champakara and Udyogmandal Canals (205 km) in Kerala have so far been declared as national Waterways and are being developed for navigation by IWAI.
PROPOSED WATERWAYS Declaration of 3 more waterways namely Godavari and Krishna rivers along with Kakinada-Pondicherry canals, East coast Canal along with Brahmani river and Mahanadi delta and Barak river is under active consideration of the Government.
SAMPLE CARGO MOVEMENT
- 627 tonnes of cement moved by JP cement from Allahabad to Patna on IWAI Vessel MV Lal Bhadur Shastri (2 trips).
- 627 tons of edible oil carried by CIWTC vessel between Haldia and Patna during Nov, 2005
- 749 tons of edible oil carried by IWAI vessels between Kolkata and Patna since July, 2005 (2 trips)
- 375 tons of sand carried by CIWTC vessel between Doriganj and Gazipur during August, 2005 and 222 tons between Rajmahal and Kolkata during November, 2005
- 290 tons of silica carried by IWAI vessel between Rajmahal and Kolkata and 17 tons of sand between Patna and Allahabad during Oct, 2005
- IWT is the cheapest mode of transport- on international standard the operating cost of IWT is 1 cent as compared to 2.5 cents by rail and 5.3 cents by road.
- It provides high fuel efficiency- 1 gallon of fuel transports one ton of freight through 827 km by IWT in comparison to 325 km by rail and 95 km by road.
INLAND WATER TRANSPORT DEVELOPMENT IN INDIATHE ROLE OF ADB
Developing waterways for navigation provides a fuel-efficient and environment means of transportation. - K. K. Mustafah
Presentation by Albab Akanda, Head, Infrastructure and Environment,
India Resident Mission, ADB at SUMINFRA 2003
Summit on Integrated Infrastructure Development in Southern Region,
19 March 2003, Chennai
I. WHY IWT?
Extensive river system
India has an extensive river system. There are 14,500 km of navigable waterways in India. Out of this 5,700 km of rivers and canals are navigable by motorized crafts.
Potential for cheaper capital cost
This extensive length is a gift of nature, much like nature having already done the initial engineering work for 5,700 km of expressways or railways. Therefore, there is the potential for cheaper capital costs. The Government estimates that capital cost of developing inland waterways is about 5-10% of the cost of developing an equivalent 4-lane expressway or railway.
Potential for cheaper maintenance cost
There is also the potential for lower maintenance costs. Again based on Government figures, maintenance costs are potentially of the order of 20% of that of road.
Potential for greater fuel efficiency
The same studies show that inland waterways transport (IWT) also has the potential to be very fuel-efficient. It is estimated that one liter of fuel can move 24 ton-km of freight by road, 85 ton-km by rail and 105 ton-km by inland water transport.
Potential as cost-effective transport mode
IWT has the potential to be a very cost-efficient transport mode. It is estimated that every shift of one billion ton-km to inland waterways will reduce transport fuel costs by $5 million and overall transport costs by $9 million. These benefits in turn can help increase economic growth in India. The savings in funds can be utilized for poverty reduction efforts while the increase in economic growth can also indirectly help in poverty reduction efforts. In addition by opening up new areas that are poorly served by other transport modes e.g. in the Northeast region, inland waterways can make a direct contribution to poverty reduction efforts.
II. CURRENT SITUATION
Miniscule share of cargo
Despite all its potential advantages, the reality is that IWT plays only a very marginal role in the transport sector. The annual cargo moved by inland waterway transport in 2000 was about 1.5 billion ton-km out of the total cargo market of 1,000 billion ton-km i.e. a modal share of only 0.15 percent. Why is that? There are several reasons for this state of affairs.
The first reason is the poor condition of the infrastructure. Most of the waterways suffer from navigational hazards like shallow waters, narrow width of channels during dry season, siltation, bank erosion, and inadequate navigational aids to permit 24-hour a day operations.
Lack of vessels
Another constraint is the lack of adequate vessels. The existing availability of vessels for inland waterway transport in the public and private sectors put together is about 400 vessels. How much can 400 vessels carry even if they are utilized to the maximum?
Lack of storage facilities
There is also a lack of supporting infrastructure like adequate and properly equipped terminals and warehouses. Storage facilities are very important if we want to make IWT attractive to users. An average IWT vessel can carry 600 tonnes. Imagine a vessel arriving at its destination. If there are no adequate storage facilities, we have to organize 60 trucks to be waiting there to carry the cargo immediately as it is loaded. How many shippers can do that? We need storage facilities so that more shippers can use IWT to transport their goods.
III. INSTITUTIONAL FRAMEWORK
IWAI for development
The institutional framework in theory is very clear. The Inland Waterways Authority is responsible for the development and regulation of the sector.
CIWTC as operator
The Central Inland Water Transport Corporation is the operator. This is the predominant operator although there are a few private firms operating as well.
Confusion of roles
However, in practice the roles are not so clear-cut. Any private operator wishing to ply between, say, India and Bangladesh needs to obtain the approval of CIWTC, i.e. its competitor. At the same time, the IWAI is purchasing a vessel to start a regular service to demonstrate the advantages of inland waterways. So we have CIWTC playing a quasi-regulatory role and the IWAI playing a quasi-operator role.
IV. ADB OPERATIONAL STRATEGY IN INLAND WATERWAYS
The Central Inland Waterway Transport Corporation (CIWTC), a largest IWT operator in India, has been incurring operating losses since its inception in 1967 and relies on Government budgetary support. Nevertheless private sector companies are profitable and have higher productivity than the CIWTC.
An Inland Water Transport Policy document was formulated and issued by the Government in January 2001. The inland water transport strategy aims at generating a more pro-active role by the different government agencies for the development of this subsector. The Government's revival plan for inland water transport includes increasing the coverage of National Waterways.
Under the current Tenth Development Plan, the Government plans to extend the national waterway system by declaring another five waterways as national waterways, i.e. (i) Barak River; (ii) Kakinada-Mercaunam Canal integrated with Godavari and Krishna Rivers; (iii) East Coast Canal integrated with Brahmani river system; (iv) extension of National Waterway 3; and (v) Damodar Valley Canal. The Sundarbans river system may also be considered.
ADB's strategy is first of all to establish the economic and financial viability of inland waterways as a viable transport mode in the relevant corridors.
ADB also recognizes that an integrated approach covering policy, institutional, infrastructure including infrastructure to facilitate interconnectivity between modes, and operations is important to ensure that inland waterway actually functions as a viable transport mode.
ADB is currently processing a $900,000 project preparatory technical assistance to address those issues.
TA Objectives As this will be ADB's first intervention in the sector, we have decided to carry out a Project Preparatory Technical Assistance. This PPTA will be done in two phases.
Phase I will take about 2 months.
Need to confirm viability
The objective of the first phase is to assess the technical, economic and financial feasibility of inland water transport. We need to establish the potential demand at different infrastructure and service parameters e.g. the optimum least available depth (LAD) and service frequencies
Need to determine optimum parameters
We need to determine the infrastructure requirements in terms of engineering requirements, dredging requirements, navigational requirements and aids, terminal facilities including warehousing/storage needs, intermodal linkages as well as equipment needs
Need to determine fleet requirements
We also need to determine the fleet size and operational performance requirements to meet the potential demand.
Phase II If inland water transport is found to be viable under Phase I, Phase II of the study will commence. The objective of this second phase will be to prepare a sector development strategy and to prepare inland waterway transport investment projects for ADB loan financing.
Strategic marketing plan
This phase will include formulation of a strategic marketing plan to increase modal share of inland waterway transport. It will identify which cargo types and origin-destination pairs are suitable for IWT and formulate a comprehensive marketing plan to ensure that this cargo is indeed attracted to IWT
Project Master Plan
We need to formulate project master plan and selection criteria. The selection criteria will be used to prioritize which sections of the national waterway system are most viable and should be improved first.
Then there is also the need for preliminary engineering for infrastructure improvements to the navigation channels, determining specifications for navigation aids, determining requirements for terminals and storage facilities and the like.
Environmental and social protection
There is also a need to ensure that the work to improve IWT does not adversely affect the environment. There is a need to carry out environmental analysis to see how the improvement works will impact on the river flow, flora and fauna. There is also a need to see how the dredged material will be disposed off. Similarly, there is a need to carry out social assessment and preparation of resettlement framework if it is necessary to relocate people along the bank, then we have to consider resettlement issues as well.
Institutional strengthening of IWAI
In this phase, we will also look at the legal and regulatory framework and if necessary recommend the formulation of a road map for legal/ regulatory reform of the sector and institutional strengthening of IWAI. We also need to ensure the sustainability of the project. This will mean identification of financing and operating mechanisms to ensure adequate maintenance.
Improving performance of CIWTC
Ensuring sustainability also means that we have to look at the CIWTC. This is an organization that we understand has the unique record of running at a loss ever since it was set up in 1967. Clearly this state of affairs cannot go on. We will therefore identify measures to improve the operational and financial performance of CIWTC. However, this will have to be seen in the light of recent developments regarding the proposed disinvestment of the agency.
Private sector development plan
We are pleased to note that the Government recognizes that the private sector has an important role to play in the future development of the IWT sector. ADB will assist by helping to formulate a private sector development plan to maximize private sector investment in both infrastructure development and vessel operations.
Cross-border transit arrangements
Finally, this phase of the TA will also look at the current arrangements for cross-border transit by inland waterways between India and Pakistan. This is important. For example, to go from Kolkata Port to Assam through National Waterway 2, it is necessary to pass through Bangladesh. It seems that presently, this will require passing through 7 Customs points, both Indian and Bangladesh. Surely this is not the best that we can do if we want to encourage more IWT movement. So we intend to review and improve Customs and documentation procedures.
Possible investment loan
This is for being done in preparation for a possible investment loan. Assuming that the study finds IWT to be economically and financially viable, and that suitable policy, institutional and development initiatives can be agreed upon together with the Government, ADB may consider a possible investment loan in 2004.
This investment loan will be for integrated development. It will tackle infrastructure, operations, and institutional issues. Perhaps the key is the marketing plan which will help pull the different components together.