Modi govt’s waterways authority set to rope in private players to build, operate terminals

With private players queuing up, Inland Waterways Authority of India looks at moving out of building terminals and jetties on waterways.

IWAI vessel MV RN Tagore at Farakka Navigation Lock, carrying India's first riverine containerised cargo on NW-1, river Ganga, from Kolkata to Varanasi in November 2018. | Photo: Special arrangement

New Delhi: With the Inland Waterways Authority of India (IWAI) scripting a turnaround in the last couple of years, it will for the first time float tenders soon to invite private players to operate the two completed multimodal terminals that have come up on the Ganga river in Uttar Pradesh’s Varanasi and Jharkhand’s Sahibganj, ThePrint has learnt.

A third multimodal terminal at Haldia in West Bengal, scheduled to be completed this year, will also be given to private players for operation, said multiple senior IWAI officials familiar with the development.

All three terminals on National Waterways-1 (Ganga-Bhagirathi-Hooghly river system) are part of the Rs 5,369-crore Jal Marg Vikas project to develop the Varanasi-Haldia stretch, jointly funded by the Narendra Modi government and the World Bank.

Infographic: Inland Waterways of India

Once the project is completed by 2023, cargo volumes of up to 27 million tonnes can be moved on NW-1.

Construction at IWAI’s Varanasi multimodal terminal. | Photo: Special arrangement

“We have already readied the tender documents. No further expansion or development will be incurred by the government. Private players have evinced a lot of interest to take over the terminal operations through a concession agreement for 15-20 years,” said IWAI vice-chairman Pravir Pandey.

“Unlike the highways sector where you have the built operate and transfer mode, here it will be equip operate and transfer,” said Pandey.

IWAI is currently working on framing the rules to allow the private players to operate the terminals.

In all, there are 111 waterways, which have been declared national waterways under the NW Act, 2016. Of these, NW-1, NW-2, NW-3 are operational, carrying cargo and passenger vessels. The IWAI has categorised the remaining waterways based on their viability and are currently working to develop them in a phased manner.

IWAI’s Sahibganj multimodal terminal. Photo: Special arrangement

‘No need for govt to invest more’

Pandey said private players are also bringing their own vessels to navigate the waterways.

“Earlier, we thought we will buy vessels and give it to private players as there aren’t adequate number of vessels in the market. But now we have found that they have bought vessels. They just need a ‘No Objection Certificate’ to operate on the waterways,” he said.

Seven big private Indian companies have submitted their application to bring own vessels. “They have their own business plans, waterway route plans,” Pandey said.

Besides, IWAI is also getting applications from private players including global companies that want to build their own jetties. “The government does not need to build jetties anymore. The ecosystem is taking over. If somebody is willing to invest Rs 100 crore to build a jetty, there must be some business in it,” Pandey said.

He added that IWAI never thought private players will come in so fast to seek permission to build jetties.

“Because of keenness shown by the private sector, this project of Rs 5,369 crore will be completed in less than Rs 4,000 crore. (The) government is making a saving of Rs 1,200 to Rs 1,400 crore because the private sector is coming in. We don’t need to invest anymore,” Pandey said.

Even the cruise business on the river has picked up. There were only two to three cruise vessels around five years ago on the Ganga. Now, nine high-end river cruise vessels operated by private operators are moving on the Ganga while three are moving on the Brahmaputra, said an IWAI official, who didn’t wish to be named.

IWAI’s upwards movement

The IWAI’s latest move was unthinkable until a few years ago. But away from public glare and almost written off, the waterways authority is slowly and steadily scripting its turnaround story.

From just 3 to 4 million tonnes of cargo being transported through NW-1 until 2016, the quantity has gone up to 6.9 to 7 million tonnes now, according to IWAI officials.

“The trend is ever increasing. The river is not generating the cargo. The cargo is shifting from the road, largely, to waterways,” said Pandey.

According to IWAI officials, the revival happened because technical and scientific studies were done properly for the first time.

“Investments were made ready through the World Bank, etc. Everything was lined up and then you made a serious attempt at developing this waterway,” said a second IWAI official, who didn’t want to be named.

Seeing the potential, big players have already started using the waterways.

Maersk Line, the world’s largest container shipping company, last year moved 16 containers on Ganga, from Varanasi to Kolkata. Maersk, which moves 12 million containers yearly across the globe, was onboard India’s inland waterways for the first time.

Firms such as PepsiCo, Emami Agrotech, IFFCO Fertilizers and Dabur have also followed suit. Adani Logistics carried container cargo with 52 containers of edible oil from Haldia to Patna. Last November, inland vessel MV Maheshwari moved 53 containers of petrochemicals, edible oil and beverages from Haldia to IWAI’s terminal at Pandu in Guwahati via NW-1 (Ganga), NW-97 (Sunderbans), Indo-Bangladesh Protocol route and NW-2 (Brahmaputra).

There are 7-8 three waterways, which are in various stages of operation at present, where total cargo transportation was to the tune of 55 million tonnes nearly two-three years ago. “In 2019, it has gone to 72 million tonnes on all these waterways. This is based on the revenue received by the Maritime Board and the government institutions,” Pandey said.

IWAI has set a target of achieving 120 million tonnes of cargo movement per annum in the next 5 years. “Once we are above 120 million tonnes per annum then we go above the 2% modal share of the total transport mix,” said the IWAI official.

Waterways changing multimodal transport mix

According to World Bank estimates, India has approximately 14,500 km of navigable waterways but freight movement through waterways is just 0.5 per cent compared to 65 per cent by road and 27 per cent by rail.

However, this is slowly changing. According to the shipping ministry data, the share has increased from 0.4 per cent to about 2 per cent over the last five to six years.

“We have already crossed 1.2 per cent with the rise from 55 to 72 million tonnes. Our aim is to reach 4-5 per cent of the modal share of transportation. That would be done in the next 10 years. And to do that, you need sustained investment,” said a shipping ministry official, who didn’t wish to be named.

IWAI officials said there is a pressing need to keep investing money in upgrading the present mechanical facilities of loading and unloading, and the fairway maintenance, taking it to higher stages.

“All this will require sustained expenditure. It won’t be Rs 5,000-crore loan that we got to start with but at least Rs 500 crore to Rs 1,000 crore every year will be required for the next 10 years. That financial back-end has to be tied up,” said one of the IWAI officials quoted above.

In the Union Budget 2020-21 announced Saturday, IWAI has been allocated Rs 678 crore — over 33 per cent of the overall allocation of Rs 1,800 crore for the shipping ministry.

Pandey said waterways was a lost economic opportunity for India. “This was a totally imbalanced logistic approach to the country’s development of transport network and in terms of transport economics. This needs to be corrected.”