NW1 is economically viable, without increasing tariffs

Mon 30 Jan 2017

Though the Inland Waterways Authority of India (IWAI) was set up way back in 1986 and five National Waterways (NW) have remained designated for several years now, it is only now that there is progress on developing a sustainable water transport system in key rivers and inland waters across the country, in a bid to take the pressure away from the rail and roadways as well as ensuring drastic reduction in emission and logistics costs.

In 2014, the Union Government announced the Rs. 5369 crore NW1 project spanning 1,400 kms from Allahabad to Haldia on the river Ganga that would come up with technical and financial assistance of the World Bank (WB). The primary objective is to enable movement of cargo on vessels up to 1,500 to 2,000 tonnes.

The government has also ensured the passage of the National Waterways Act 2016 by which an additional 106 waterways were declared as NWs, taking the total to 111 NWs.

In an interview, IWAI Vice Chairman Pravir Pandey expresses optimism and gives an update on NW projects. Edited excerpts:

What is the overall plan for NW1?

It took 18 months to prepare the detailed study. Now, we are constructing three multi-modal terminals with railway and road connectivity at Varanasi (U.P.), Sahebgunj in Jharkhand and at Haldia in Bengal. We are also constructing a new navigation lock at Farakka.

Keeping in mind that a rail rake carries 2,200 tonnes of cargo, we will be operating vessels with the capacity of 1,500 to 2,000 tonnes so as to provide commercial and competitive choice to users. Only then would they like to shift.

To move a 2,000-tonne barge, we need a minimum three-metre depth/ draft between October to April. In the first phase, we have decided to create a 1,400-km channel with a width of 45 metres and a minimum draft of 3 metres from Varanasi to Haldia to enable two vessels to pass smoothly.

We have engaged DST Germany to design ships for us. Initially they will be designing car carriers which will have capacity to carry 300 cars and these vessels would require about 1.5 metres water depth.

The whole objective is to design special vessels that can run on low draft but can carry high capacity. That is our challenge. We don’t want to do a lot of dredging in the river. To address concerns of environmentalists, DST Germany is designing LNG-powered vessels.

In August last, we had conducted a trial run from Varanasi to Kolkata wherein only 35 Maruti cars were transported in six days. Maruti had stated that the transportation cost had reduced by Rs. 3,800 per car.

We are also introducing Ro-Ro (Roll-on/Roll-off) vessels which can carry 18 to 20 trucks to enable them to avoid traffic jams on congested old bridges and reach their destinations faster. We have identified 10 places including Buxar, Varanasi, Gazipur, Patna, Munger, Bhagalpur, Manihari, Sahebganj and in Haldia. Currently we are providing Ro-Ro services at Sahebganj and Manihari sectors.

A consortium is working on the environmental impact assessment while Hamburg Port, our consultant, is advising on market development, traffic projection and cargo analysis.

Hawaii Engineering and HR Wallingford U.K. are our engineering consultants. They have already submitted the entire engineering report.

Following requests from state governments that want us to develop ferry services at several congested cities such as Kolkata, Varanasi and Patna to get the pressure off roads, we have now identified 18 locations in six cities by the NW1 where we will provide ferry services. We have engaged Massachusetts Institute of Technology in the U.S. and Thompson Design Group in this project. We will introduce both longitudinal as well as across the river ferry service to decongest urban municipal transport.

What has been achieved so far?

We have made quite bit of progress. This is one of the fastest (moving) infrastructure projects in the country right now. It was announced in July 2014. Only the concept was there. Today, the construction of the multi-modal terminal at Varanasi has already began. Afcons is doing it.

The Sahebganj multi-modal terminal is also under construction by L&T. The Farakka Navigation Lock is being done by L&T. It is a complicated engineering challenge. SB Belgium has designed it and already work has started on the ground. The Haldia multi-modal terminal has been awarded to ITD Cementation. We have just received the Coastal Zone Regulation clearance for this one. The dredging awards will be given soon and dredging will start by February and March.

When we have vessels moving, we will set up the Vessel Tracking and Monitoring System to avoid collision of vessels. For that, we are developing a River Information System. Just like air traffic control at airports, we are developing river traffic control which will be sharing information about the rivers and the movement of vessels.

How viable is this project?

Though we are developing many NWs, the NW1 is economically viable. We are spending only 5% of the project cost on land acquisition. In highway projects more than 50% of the project cost goes for only land acquisition and compensation packages.

To make the project viable without increasing the tariff, we will lease out land to private parties to set up warehousing, tourism or cold-storage facilities. We are acquiring some land at our terminals and jetties for this purpose. Today the user only pays 2 paisa per tonne per km. We are not going to raise that.

How much money has been invested?

Already projects worth Rs. 1,700 crore have been awarded and the projects are on the ground. We will be paying as per the bills and money is not an issue.

When will the project be completed?

In 2021. But it does not mean that vessels will not start moving till then. We have already started moving vessels on the trial run. Once we have the car carriers and the LNG powered vessels, we will start moving vessels with whatever facility we will have by 2019.

What is IWAI’s fund-raising programme?

Seeing the progress we have made, the ministry of finance has now allowed us to go to the market to raise Rs. 1,000 crore through infrastructure bonds. We will start this issue in February 2017. Besides, we have signed MoUs with port trusts to jointly develop NWs that would bring traffic to them.

After NW1, have you started incremental work on other NWs?

We have already declared 111 waterways. In the first phase, 32 waterways, which are found to be completely viable, will be developed.

These include NW2 (the Sadiya-Dhubri stretch on river Brahmaputra with a length of 891 km), NW16 (Lakhipur-Bhanga stretch of river Barak (121 km), NW6 (Lakhipur to Bhanga of river Barak in Assam with a distance of 121 km), NW4 (the Kakinada- Puducherry canals along the Godavari and Krishna rivers in Andhra Pradesh, Tamil Nadu and Puducherry with a total length of 1,078 Km), NW5 (the Brahmani river and Mahanadi delta rivers, integrated with East Coast Canal in Bengal and Odisha, with a total length of 588 km), NW3 (the West Coast Canal between Kottapuram and Kollam (168 km) together with the Udyogmandal canal (23 km) and the Champakkara canal (14 km) in Kerala with a total length of 205 km)

We are working on all these projects simultaneously. We have asked for a budget and we are creating funds for all these.

On NW2, the construction of a permanent rollon-rolloff or the Ro-Ro terminal at Dhubri is in progress. Another terminal will be developed at Hatsingimari on the opposite bank of river Brahmaputra.

To facilitate dry docking repair, a project for construction of slipway at Pandu has been sanctioned and work is under way. It will be completed by the month of December in 2018.

On NW4, the stretch between Muktyala to Vijayawada is being planned for immediate operation for which dredging work to remove shallow patches is being carried out. As far as NW5 is concerned, an MoU has been signed between IWAI and Paradip Port Trust for the development of this project.

What is the investment plan for the 32 rivers?

The total budget as per our estimate is Rs. 12,000 crore. The Ganga one is separate.


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