India: IWAI seeks a pie of fuel cess to develop waterways

IWAI.jpg The shipping ministry is weighing a plan to get cabinet backing for utilizing a part of the fuel cess collected since 2000 for building highways to develop waterways.

The move follows the central government’s ambitious plan to tap India’s vast network of rivers and canals stretching 14,500 km for moving goods through a mode considered to be cheaper than rail and road and environment friendly.

“Efforts are being made to amend the Central Road Fund Act to include allocation for national waterways also,” P.K. Srivastava, hydrographic chief, Inland Waterways Authority of India said on 29 January at the East Coast Maritime Business Summit in Visakhapatnam.

The government is looking to declare 106 new inland waterways spread across 24 states as national waterways in addition to the five existing national waterway networks. The National Waterways Bill 2015 to facilitate the task was approved by the Lok Sabha during the winter session in November-December 2015. The Bill is awaiting Rajya Sabha approval to become law.

“…We are trying to tell the cabinet to amend the Central Road Fund Act to include national waterways also. We are looking at an allocation of Rs.1,000 crore a year,” Srivastava said. The IWAI has proposed this to the government, he added.

The government started collecting cess on petrol and diesel from 2000 to build national highways. The money is parked with the Central Road Fund set up through a central legislation. The Rs.2 per litre cess on petrol and diesel contributes about Rs.8,000 crore a year for building a modern road network including construction and maintenance of state highways by state governments, development of rural roads by state governments, construction of rail over-bridges by Indian Railways and construction and maintenance of national highways by the central government.

Currently, cargo movement along the five existing national waterways totalling 4,434 km is not even 3 million tonnes a year, accounting for a paltry 3% of all cargo movement in India. “We want to raise the share of waterways in overall cargo movement to 15%,” India’s shipping minister Nitin Gadkari said in Mumbai on 22 January while speaking at an industry event.

“There is enormous potential for waterways in the country; but this has not been exploited as yet,” says Joy Saxena, group president and whole time director at Jindal ITF Ltd, the only private firm running a cargo service on inland waterways in the country.

“It requires government support such as dedicated facilities, priority berthing and night navigation to make operations faster and commercially viable. Otherwise, private firms will find it difficult to invest in this sector. The turn-around time of barges/ships is the name of the game”.

Jindal ITF started a seven-year contract in October 2013 for moving 3 million tonnes of imported coal a year from Sand Heads in the Bay of Bengal to the power plant of NTPC Ltd at Farakka in West Bengal on National Waterway 1 through a combination of coastal shipping and inland waterways. This is the only organized coal transportation through waterways.

NTPC saves approximately Rs.197 crore per annum on moving 3 million tonnes of coal through waterways because it is cheaper by Rs.658.09 per tonne than rail freight, according to the shipping ministry.

IWAI is implementing a World bank funded project called “Jal Marg Vikas” on river Ganga (national waterway 1) from Allahabad to Haldia stretching 1620 km for developing and improving navigational infrastructure and maintaining a depth of 3 meters needed to help commercial navigation of 1500-tonne ships.

Srivastava says that IWAI is looking at public-private-partnership model for building infrastructure along waterways. But, the private sector has concerns.

“We need guarantee on 2-3 counts… Paani kitna hai, depth kitna hai (how much water and depth is there) while looking at this sector for potential investment. Otherwise hamaari himmat nahin padthi (we are not confident),” said D.K. Manral, chief executive officer of Vizag General Cargo Berth Pvt. Ltd, a unit of London-listed metals group Vedanta Resources Plc.

“Our rivers are dangerous. It is a naala in non-monsoon season and becomes a big river during monsoon season. The entire dynamics of the country is different… you hardly get water and then there is full of water,” said an executive at Tata Consulting Engineers Ltd.

Source: Live Mint

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