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Banking sector being roped in to develop inland waterways

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Easy financing models being worked upon to promote private participation for developing inland waterways.

As part of its readiness, the (IWAI) plans to bring on board the sector to ensure availability of financing options for private players engaged in Inland (IWT) sector even as the Waterways are being developed in the country.

Vessel financing and funding for Operation and Maintenance (O & M) of IWT assets is a challenge for shippers, and asset management firms as the sector is not yet ready with any customized financing option for the sector.

The efforts being taken to facilitate vessel procurement and O & M of existing and upcoming assets - intermodal and multimodal terminals, jetties, logistics hubs, fuel bunkering and storage and other - for private players through customized financing options are in line with the Government of India's 'Make in India' initiatives and will be a shot in the arm for both domestic and global private players interested in working for the IWT sector.

At a day-long workshop held here with public and private sector banks, shippers, cargo owners and various other stakeholders to work out a formidable model in this regard, underlined that banks needed to finance the emerging business opportunities that the private players are inclined to be involved with.

"We have started working on eight new besides five others on which work had been on in full swing. Lots of investment are being done to develop the waterway sector which is going to complement railways and roadways," she said.

Member (Finance), too noted that "areas of partnership by diagnosing the factor of constraint of flow in this sector, learning from international experiences and sensitizing government and agencies to promote investment in this sector" may be explored.

Responding to IWAI's assessment, of Baroda MD and P S Jayakumar saidthat since the IWT comes under the sector, it willhelp "Banks to provide long term financing having 15-25 year long tenor loan commensurate with the economic life of the ship".Our can provide the flexible scheme for financing like providing the moratorium period for loans on existing as well as the new projects, he said adding that issue of bonds can be the alternative source for long-term loan capital financing ship-owners. He, however, also flagged that 'due to financial regulations/industry classification issues, banks are not comfortable in lending for higher tenors."

Waterways are being developed as a key intervention by the Government as part of an integrated network strategy and will help correct the transport modal mix that imposes huge logistics costs on the Indian The costs of logistics in India, at 15 % of GDP, are about twice those in the

emphasised that work on capacity augmentation for making NW 1 and NW-2 were in full swing. "has only one percent of IWT modal share in its However, things are on ground and moving. The sector throws ever growing opportunities for cargo and passenger movements".

To make Inland transport a vibrant sector, Rajat Sachar, Advisor, Ministry of Shipping, sought recommendations from private players for policy changes, if needed. For the first time, government has decided to invest Rs 5369 crore on one NW," he said while referring to the Jal Marg Vikas Project being implemented between to on the

He also appealed to the financial institutions to offer products for private sector investment in IWT sector where annual government funding has increased by 12 times in the last four years.

(Logistics) at the of Commerce and Lead Environment Specialist, World Bank, Tapas Paul also underlined that a comprehensive network of Waterways are being developed in and private firms needed to take advantage of the IWAI in the best possible way.

As part of its efforts to encourage industry, IWAI will hold such consultations periodically with banks and stakeholders.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, May 12 2018. 13:41 IST
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