Ministries Told To Route Bulk Goods Via Inland Waterways

The Union cabinet has notified all ministries that bulk goods should be transported through inland waterways wherever possible.

The goods specified include, fertilisers, cement, petroleum products, iron ore and bulk agricultural commodities.

The fundamental purpose of this cabinet note, official sources said, was to ensure that the congestion in the ports and the load on the road and railway networks are considerably reduced. This is also intended at reducing freight costs of such goods. This was also expected to help coastal shipping operators, the sources added.

Currently goods unloaded at the ports are transhipped either to road transport or to railway wagons for transport into the hinterland. The sources said that using such methods of transport would involve transhipping the goods onto barges for onward transportation into the hinterland.

 

The cost reduction on account of this shift could be as much as 40 per cent for movement of goods.

This would also result in an improvement in the utilisation of the three national waterways which have been thrown open for private sector participation. The three waterways are Allahabad-Haldia (1,620 km), Sadiya-Dhubri on the Bhrahmaputra (891 km) and the Kotturpuram-Kollam (168 km).

The sources said that sectors of these waterways have already been thrown open to the private sector on build-own-operate-transfer (BOOT) basis. The cabinet note would assure cash flows for inland waterways projects. Currently privatisation of inland waterways are yet to take off, since freight movement along these routes is not assured. As a result such projects are not considered bankable.

The sources said that power projects like the Kayamkulam project of the NTPC which has tied up for coal supply with Coal India would also benefit by keeping the freight costs to a minimum. NTPCs Kayamkulam project falls in the National Waterway number three.

When the project is finally commissioned, it is expected to consume about 5,000 tonnes of coal per day. NTPC normally transports its coal requirements through the rail network.

In addition, the public sector Fertilisers and Chemicals of Travancore (FACT) which transports both feed stock and finished products would also be benefited by the waterway, the sources said. FACTs feed stock is currently brought in through pipelines or through the railways.

Other projects that would benefit from a shift to inland waterways include the Bongaigon refineries, which comes in the vicinity of National Waterway number two, the sources said. Such transport is already covered under the Protocol on Inland Water Transit and Trade between India and Bangladesh.