Shippers transporting goods through National Waterways No 1 (Jal Marg Vikas Project) along with NW 2 and 16 are proposed to get a 35 per cent subsidy. This could be a gamechanger for trade but concerns about low depths remain, says a source.

The scheme, ‘Incentives to promote the utilisation of inland waterways transport (IWT) sector by cargo owners, and for starting Scheduled services for cargo movement on NW-1, NW-2 via IBP Route and NW-16’ addresses two specific needs of the IWT sector with two distinct components.

The scheme aims to provide impetus to modal shift of cargo to the IWT mode by providing incentives. It also seeks to demonstrate the reliability and the readiness of the IWT sector to boost the confidence of the stakeholders.

According to the scheme, a 35 per cent incentive will be provided to promote utilisation of the inland waterways transport sector by cargo owners and for establishing scheduled service for cargo movement on NW-1 and NW-2 and NW-16 via Indo Bangladesh Protocol route has been approved by the government.

The scheme is expected to divert 800 million tonne km of cargo on the IWT mode, which is nearly 17 per cent of the current cargo of 4,700 million tonne km on NWs. The scheme is currently proposed at a cost of less than ₹100 crore for three years and can be scaled up or modified depending on the success of the scheme, the document stated.

At present, road transport accounts for nearly 65 per cent of the modal share, followed by rail at 26 per cent while IWT has only a 2 per cent share in India’s overall freight movement.

Some of the indicative routes are transportation of cargo by IWT between Haldia/Kolkata and Patna / Varanasi on NW-1; transit cargo from / to Kolkata/ Haldia to Pandu / Karimganj / Badarpur on NW-2 & NW-16 using IBP route and transportation of cargo by IWT between Pandu and Dibrugarh on NW-2, the document says.

‘Develop infra’

An industry source said while subsidy is a welcome move, developing infrastructure and increasing the depth throughout the journey is crucial.

A spokesperson for Tata Steel said, in NW1 (Haldia to Varanasi via Sahebganj and Patna), the route has a draft of less than one meter, limiting barge capacity to a maximum load of 150 mt. Trials have not been conducted yet due to concerns over scalability, poor dredging, prolonged transit times due to no night time navigation, and unfavourable costs.

In NW2 and NW16 (Haldia to Pandu and Ashuganj), Tata Steel successfully conducted trials and few subsequent shipments of finished goods (TMT Bar) to Guwahati and Agartala via NW2 and IBP/NW16 waterways, respectively.

However, the initiative could not be regularised or scaled due to excessively high transit times due to no night time navigation, higher costs for Guwahati compared to rail and road transport, and infrastructural challenges at the discharge terminals.

The scheme is a transformative step towards sustainable logistics. The waterways expense component is around 60 per cent of the end-to-end delivery cost so the effective cost reduction will be around 20 per cent of overall logistics cost.

The government’s initiative to promote waterway transport through a subsidy scheme is a welcome move and will make waterways cost competitive. However, to fully realise its potential, significant infrastructural challenges such, the spokesperson said.