India, World Bank ink $375 mn deal to help develop country's first waterway

The Union government and the World Bank have signed a $375 million loan agreement for developing country's first modern inland waterway on the river Ganga between Varanasi and the seaport of Haldia. The 1,360 km-stretch of the waterway will bring thousands of jobs in cargo logistics and transportation to one of the most populous regions in the country.

The project would facilitate the Inland Waterways Authority of India (IWAI) to put in place infrastructure and navigation services needed to develop the waterway -- known as National Waterway 1 -- as an efficient logistics artery for northern India, the World Bank said in a statement.

The statement also claimed that the capacity augmentation of National Waterway 1 (Jal Marg Vikas) Project will help save more than 150,000 tons of carbon dioxide equivalent in greenhouse gas emissions annually by moving cargo away from fossil fuel-consuming road and rail networks.

The project, approved by the Union Cabinet last month, falls in Uttar Pradesh, Bihar, Jharkhand and West Bengal and major districts under its ambit are Varanasi, Ghazipur, Ballia, Buxar, Chhapra, Vaishali, Patna, Begusarai, Khagaria, Munger, Bhagalpur, Sahibganj, Murshidabad, Pakur, Hoogly and Kolkata.

The route is one of the country’s most densely populated areas, and a sizeable 40 percent of the domestically traded goods either originate from this resource-rich region or are destined for its markets.

While the region generates about 370 million tons of freight annually, only about 5 million tons currently travels by water.

The project is expected to be completed by March 2023 and will provide an alternative mode of environment-friendly and cost-effective transport. It will contribute to bringing down logistics costs in the country and boost infrastructure development like multi-modal and inter-modal terminals, Roll on-Roll off (Ro-Ro) facilities, ferry services and navigation aids.

At present, goods in the country are transported by congested road and rail networks, which slows cargo movement, adds to uncertainties, and generally increases the costs of trade logistics.

Experts believe that carrying bulk goods on waterways is cheaper, more reliable and less polluting than transporting them by road or rail.

Once operational, NW1 will form part of the larger multi-modal transport network being planned along the Ganga. It will link with the Eastern Dedicated Rail Freight Corridor, as well as with the area’s existing network of highways, allowing the region’s manufacturers and agricultural producers to use different modes of transport to reach markets in India and abroad.

Private sector participation under the PPP mode is expected to be around $45 million. Major components of the project are fairway development, construction of multi-modal terminals at Varanasi, Sahibganj and Haldia besides construction of inter-modal terminals at Kalughat and Ghazipur and construction of a new navigation lock at

Farakka.

The proposal to build the NW1 was finalised after a study conducted by the IWAI and based on the findings of this study, the development of the waterway was proposed at an estimated cost of about $700 million by seeking technical assistance and investment support from the World Bank to the tune of $350 million in three phases.