UK can invest in new Indian waterways

UK can invest in new Indian waterways

THE Indian government hopes to harness the country’s 50,000 km of sea and river fronts as waterways and is exploring new ways of raising Rs 70,000 crore initially to develop these channels, said Nitin Gadkari, Road Transport, Highways and Shipping Minister, pictured.

Mr Gadkari said that such projects in the ports and shipping sector, worth an investment of Rs 1,20,000 Crore (£12.2 billion) will be showcased before potential investors at the Maritime India Summit to be held in Mumbai from 14-16 April, 2016. The objective is to attract potential investment in the rapidly transforming maritime sector and boost exports.

The Indian Parliament has just passed a crucial Bill to declare 111 rivers as being the National Waterways, which paves the way for to develop them as transport carriers. Until now, only five of the river stretches are classified as National Waterways.

The Indian government is committed to working hard in developing these waterways as the environment-friendly mode of transport, a move which is bound to reduce significantly the huge 18 per cent logistics cost in transport around India.

Mr Gadkari said: “India has its unique advantage, as 14 of its states are bestowed with 7,500 km of coastline with 14,500 km of potentially navigable waterways. In addition, 116 rivers across the country provide 35,000 km of navigable stretches.

“At the same time, we are looking at innovative ways of financing as we require an initial (amount of) about Rs 70,000 crore to develop these river stretches into navigable transport ways.”

Capt Kamal Chadha, managing director of leading Indian maritime marketing company Marex Media and editor of its Marex Bulletin journal, said developing India’s new National Waterways system offered many opportunites for UK maritime firms in the country.

“For the maritime sector of India, it’s exciting times indeed. This is the time for various service providers and British marine educational institutes to partner with Indian entrepreneurs and vocational institutes for grooming the maritime workforce in India,” said Capt Chadha.

“The Shipping Ministry is pushing the development of coastal shipping and inland waterways, encouraging foreign direct investment in the maritime sector, and supporting the expansion of ports and maritime infrastructure.”

Mr Gadkari also said that besides budgetary support, multi-lateral funds, public-private partnership and market borrowing would be explored. Access to funds such as the National Clean Energy Fund and the Central Road Fund will also be required because of environment benefit of IWT.

He added: “We would not have any dearth of funds. In this year’s budgetary allocation, Rs 800 crore have been provided for development of waterways, while we can raise another Rs 800 crore through issuing tax-free bonds.

“Our ports will have profit of Rs 6,000 crore this financial year which will gradually increase. Besides, they have fixed deposits worth Rs 8,000 crore. A bank is ready to provide Rs 50,000-crore loan in dollar terms at a very low rate of 2 per cent. With all these measures, we will generate enough funds to revolutionise India’s waterways.”

Capt Chadha said: “India remains keen on private as well as public participation in the maritime future of the country, which by all accounts offers tremendous commercial scope in all its sectors.

“The Indian government’s focus on developing coastal shipping as well as inland waterways in the country throws a plethora of business opportunities for British maritime entrepreneurs, as India is expected to invest billions of rupees over next few years for buying marine equipment, small to mid-sized vessels, surveillance and navigation gadgets.”

The Minister said reforms in the sector would be visible in a few years, adding that water transport was not only environment-friendly but also much cheaper as it costs Rs 1.5 a km to carry the cargo from road while the same stands at Re 1 from rail, whereas through waterways it reduces to only 25 paise per km.

Mr Gadkari said by promoting water transport, the logistic cost, which is 18 per cent in India as compared to barely 8-10 per cent in China and 10-12 per cent in European countries, will come down significantly.

“One horse power can carry 4,000 kg load in water but only 150 kg by road and 500 kg by rail. One litre of fuel can move 105 tonne per km by inland waterways but only 85 tonne per km by rail and 24 tonne per km by road,” the Minister said.

He regretted that the waterways had taken a backseat in India, with only 3.5 per cent of trade being done through the mode here as against 47 per cent in China, 40 per cent in Europe, 44 per cent in Japan and Korea and 35 per cent in Bangladesh.

He said of the 106 National Waterways (NWS) proposed to be developed, tender documents for development of eight NWs is under advanced stage of preparation. For the remaining NWs feasibility studies are being undertaken as an advance action. For 46 NWs feasibility and detailed project report is under preparation and is expected by July 30,” he said

Apart from being a transport mode, NWs will have huge potential for cruise tourism, water sports, fisheries development and feeder routes. Parliament on March 9, 2016, gave nod to a bill to convert 111 rivers across the country into National Waterways.

The bill provides for enacting a central legislation to declare 106 additional inland waterways as the national waterways in addition to five existing national waterways.

The Minister said that the focus of the Government is on creating more jobs in the maritime sector. He added that one crore jobs – 4 million direct and 6 million indirect – have been identified to be created in 27 port based industrial clusters, coastal shipping and inland waterways under Sagarmala project.

 

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