The New Form of Transport Saving India Billions

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K.Venkateshwar. Rao 
23 JULY 2019

Inland waterway transport is likely to prove a great benefit for India’s industrial sector, as the government aims to remove hurdles for doing business in India and encourage the industrial sector to play a more significant role in the Indian economy. 

According to the government’s findings, India has around 14,500 kilometres of navigable waterways, comprising of rivers, canals, backwaters, and creeks. The cost of transporting one tonne freight over one kilometre by waterway is just 1.06 Indian Rupees (INR), or $0.015 USD, compared to 2.58 INR ($0.037 USD) by road and 1.41 INR ($0.020 USD) by rail. Inland Waterways Authority of India (IWAI) officials said that with the opening of the waterway, business activities on National Waterway One (NW1) gained momentum, with many cargo owners, like PepsiCo, IFFCO Fertilizers, Emami Agrotech, and Dabur India, coming on board. 

In the inauguration ceremony of PSU Concor’s first containers’ voyage through coastal shipping, Union Minister for Shipping and Road Transport, Nitin Gadkari, said: “Waterways transport in India can bring down logistics costs by 4%, and will boost exports by 30%.” Works to turn 11 rivers into waterways are underway. He further added that coastal shipping is being developed in such a way that it can carry all kinds of cargo – fertilizers, automobiles, steel, food grains, cement, and sugar. Gadkari also said, “We had paved the way for exports to Bangladesh and Myanmar through Varanasi. Ships are being designed to carry 3,500 tonnes of cargo each in place of 2,000 tonnes at present.” Concor, a public sector unit, estimated in a study that 10% of the business volume movement through the coast would be around 2,700 (twenty-foot equivalent units) TEUs per month. 

According to IWAI officials, over 2,500 billion tonne-kilometres (BTKM) of freight is carried annually by road, rail, air, and waterways, with the waterways’ share at a mere 0.5%. An emphasis on coastal shipping to complement road and rail networks will lead to overall logistic cost savings. Movement of both raw and produced materials using coastal shipping and inland waterways is 60% to 80% cheaper than road or rail transport. As per an estimate, coastal movement of coal to Andhra Pradesh and Karnataka based power plants could result in an annual saving of more than 10,000 crores INR (almost $1.5 billion USD) to these plants. 

The Vice Chairman of IWAI, Pravir Pandey, said: “The environment-friendly, and cost-effective, inland waterways are emerging as a new transport modal choice in India. For ships running on methanol, we are developing fuel bunkering facilities at intervals of about 500 kilometres on the entire 1,600 kilometre Haldia-Varanasi stretch to help reduce the carbon footprint of the cargo industry.” Pandey further added: “Waterways Authority of India’s (WAI) goal is to increase the cargo transportation on National Waterways from 55 million tonnes currently to 150 million tonnes by 2023. We are interacting with key players to use waterways as their choice for transportation.” 

IWAI officials stated that the Jal Marg Vikas Project (JMVP), announced by the Union Finance Minister in his Budget Speech for 2014-15, is being implemented for a capacity increase of India’s National Waterway One on the Haldia-Varanasi stretch for a distance of 1,390 kms. NW1, along with the National Highway 2 (NH2) and the proposed Eastern Dedicated Freight Corridor, constitutes the Eastern Transport Corridor of India. It connects the National Capital Region (NCR) Delhi with the eastern and northeastern states. Now, it will function as a link to Myanmar, Bangladesh, Nepal, Thailand, and other East and South-East Asian countries via the Kolkata port and the Indo-Bangladesh Protocol Route.
It may be noted that with the country’s first PepsiCo (India) container movement on the inland vessel – MV RN Tagore on November 12, 2018, from Kolkata to Varanasi on National Waterways 1 – Ganga, India achieved a milestone in the history of India’s inland waterway transport sector. Container cargo transport comes with several inherent advantages, such as reducing the handling cost, minimizing damage and pilferage, allowing smoother modal shift, and enabling cargo owners to reduce their carbon footprints.

The New Form of Transport Saving India Billions

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