The working group report

1.4.1.3 National Waterway No.3

• 
  Fairway Development:
  

The target was to complete capital dredging and thereby provide LAD of 2 m in the entire waterway by the end of 10^th plan. For providing 2 m LAD in the entire waterway the requirement was to complete capital dredging which was started in 1998-99. However, due to various problems including disposal of dredged material, which at places was objected to by local residents, the presence of fishing nets in the waterway, land acquisition for widening of canals and court cases in respect of land acquisition, contractual litigations in respect of the capital dredging could not be completed in the entire waterway, except between Kochi and Thakazhi jetty and most of the portion between Kochi and Kottapuram. However, in some portions of Kochi-Kottapuram and many places between Thakazhi jetty and Kollam, capital dredging could not be completed despite concerted efforts by IWAI by engaging the State Govt. up to the highest level. Efforts are however on to complete the capital dredging. Annual maintenance schemes including maintenance dredging, bank protection etc. were executed on an year to year basis

• 
  Navigational Aids
  

The target was to provide night navigation aids in the entire waterway by the end of 10^th Plan. However since capital dredging could not be completed in the entire waterway, provision of night navigation aid was also confined to the dredged stretch only. Day channel marks using coconut/concrete pillars as well as night navigational aids with buoys and lights between Kochi and Allapuzha were completed during the 10^th Plan. A project for providing night navigation facilities in the remaining portion of the waterway was also sanctioned and actions were in hand to implement it.

• 
  Terminals:
  

Fixed terminals at seven locations namely Kottapuram, Alluva, Kayamkulam, Viakom, Tannermukham, Trikkunnapuzha and Maradu were completed during the 10^th Plan. Initially it was also planned to provide terminals at CSEZ (Ernakulam), Allapuzha, Kollam and Chavra. However, construction of terminals at CSEZ and Chavra was dropped since the cargo was not available immediately, and terminal at Allapuzha could not be taken up since the State Government was unwilling to hand over the land. Actions were in hand to get the terminal at Kollam constructed through CPWD.

• 
  Vessels:
  

For undertaking dredging on the shoals, talweg and detailed surveys, inspection and monitoring of field works and demonstrative operation of cargo vessels, different types of vessels are required. These vessels are one of the important hardware required to obtain the desired output. Since these vessels are not available on hire it is necessary for IWAI to have a fleet of required vessels. In the 10^th Plan therefore actions were taken to procure different types of vessels for which a number of projects were prepared/being prepared/tendering was in progress. A list of vessels available on 31.3.2002 (i.e. end of 9th plan), vessels added in 10th plan, vessels under construction and in pipeline for acquisition, as in November 2006 is given below:

S.N.	Vessel	Available on 31.3.02	Added in 10^th Plan	Under construction	In Pipe Line	Remarks	Total
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
1.	Cutter Suction Dredger	-	1	-	2	Project approved	3
2	Work Boat	-	-	-	2	-do-	2
3	Tug	-	-	-	1	Action Plan approved	1
4	Survey vessel	1	-	-	1	-do-	2
5	Patrol Boat	-	1	-	-	-	1
6	Mobile Crane	-	-	-	3	-do-	3
7	Fork Lift	-	-	-	3	-do-	3
8	Platform Trucks	-	-	-	3	-do-	3
9	Water Hysinth Harvestor	-	-	-	1	-do-	1
10	Hopper Barge	-	-	-	1	-do-	1
11	Cargo Vessel SPV(300 T)	-	-	-	1	-do-	1

1.4.2 Action Plan for making existing National Waterways fully functional
An Action Plan has been prepared for making the three national waterways fully functional by March 2008. Under this Action Plan, specific projects have been identified for development of fairway, navigational aids, terminals, procurement of vessels for development and maintenance of fairway (namely dredgers, survey launches etc.) and also some vessels for operating demonstrative cargo services on the three national waterways. Time lines for preparation of the projects, their approval by the competent authority, award of work and completion of work have also been included in the Action Plan. The Action Plan envisages a judicious mix of fixed and floating terminals with mechanized handling facilities and access and egress by road/rail, facilities for day and night navigation and professional out-sourcing to implement the projects. The Action Plan envisages fund requirement of Rs. 630 cr for making the three national waterways fully functional by March 2008. It is anticipated that even after making the waterways fully functional, it will take some more time for the private sector to become encouraged enough to invest in acquiring and operating vessels for transportation of cargo and therefore, the Action Plan includes demonstration voyages/fixed schedule sailings for about 3 to 4 years with viability gap funding. It is for this purpose that acquisition of cargo vessels has been given priority under the Action Plan.

Under the Action Plan, following infrastructure is proposed to be provided:-

National Waterway No. 1
Fairway LAD of 3m in Haldia – Farakka, 2 m in Farakka-Varanasi and 1.5m in Varanasi – Allahabad.

Navigational aids 24 hrs. navigational facilities.

Terminals Fixed terminals at Haldia, BISN (Kolkata), Pakur, Farakka and Patna. Floating terminals at Haldia, Kolkata, Diamond Harbour, Katwa, Tribeni, Behrampur, Jangipur, Bhagalpur, Semaria, Doriganj, Ballia, Ghazipur, Varanasi, Chunar, and Allahabad.

National Waterway No. 2

Fairway LAD of 2 m from Dhubri to Dibrugarh and 1.5 m from Dibrugarh to Sadiya.

Navigational aids 24 hrs. navigation aids from Dhubri to Dibrugarh.

Terminals Fixed terminal at Pandu. Floating terminals at Dhubri, Jogighopa, Tejpur, Silghat, Dibrugarh, Jamgurhi, Bogibil, Saikhowa and Sadiya.
National Waterway No.3
Fairway LAD of 2 m
Navigational aids 24 hrs. navigational aids.
Terminals Fixed terminals at Aluva, Viakom, Kayamkulam, Kottapuram, Maradu, Chertala, Trikkunnapuzha, Kollam and Alappuzha
With this level of infrastructure, following cargo transportation (in billion tonne km) on three national waterways is projected upto 2024-2025:-
NW-1 NW-2 NW-3 Total
2008-09 0.571 0.110 0.243 0.924

2011-12 1.457 1.230 0.396 3.083

2016-17 3.403 2.373 0.437 6.213

2021-22 6.774 4.730 0.506 12.010

2024-25 8.688 4.871 0.558 14.117
For attaining the level of above mentioned cargo transportation on the three national waterways, it is also proposed under the Action Plan to take effective steps to attract multi-modal operators to IWT, and engage shippers to become operators of IWT mode by providing incentive of say 20 paisa per tonne km and request the Govt. to reserve certain cargos (particularly owned/controlled by PSUs) for IWT along the corridors where viable waterways exist.
1.4.3 Cargo transportation on National Waterways
Despite inherent strengths of IWT mode, cargo transportation by this mode has not increased significantly though it has shown generally increasing trend in last 3-4 years as given below:-
(Cargo moved in btkm)

NW-1 NW-2 NW-3
2002-03 0.128 0.004 0.019

2003-04 0.160 0.029 0.022

2004-05 0.312 0.252 0.015

2005-06 0.412 0.322 0.017

Major commodities moved on these waterways are as give below:-
NW-1 Cement, Stone chips, Iron dust, Flyash, Edible oil etc.

NW-2 Cement, Jute, Tea, Forest products, POL, Fertilizers, Coal etc.

NW-3 Sulphur, Rock phosphate, Liquified Ammonia Gas, Petroleum products etc.
Besides, during the 10^th Plan there had been significant increase in cargo transportation on the waterways of Goa and Mumbai and for the first time, the total transportation of IWT cargo in the organized sector crossed the 2 billion tonne km mark in a year. In 2005-06 the cargo transported in the organized sector on NWs, Goa and Mumbai was of the order of 2.823 billion tonne km as against 1.0 billion tonne km in 2001-02 (end of 9^th Plan), or an increase of 282 % in 4 years of 10^th Plan. In terms of tonnes also this figures has increased from 19.76 million tonnes (2001-02) to 50.41 million tonnes (2005-06) ie an increase in 255%. A year wise statement of cargo transportation on NWs, Goa and Mumbai waterways from 2001-02 to 2005-06 is enclosed in Annexure- III.
1.4.3.1 New Developments:

• 
  Demonstrative voyages/Fixed Schedule Sailings are being carried out on National Waterway No. 1 between Haldia and Patna since January, 2004 using vessels of CIWTC. Under this initiative, several types of cargo were transported e.g. stone chips from Pakur to Patna and Pakur to Kolkata, edible oil from Haldia to Patna, iron, Silica sand from Patna to Kolkata etc.
  

• 
  13 vessels of CIWTC have been leased out to the private sector and these are being used for cargo transportation.
  

• 
  There has been regular transportation of POL products of Numaligarh Refinery by private sector.
  

• 
  Private operators also transported bitumen from Haldia to Pandu, coal from Jogighopa to Kolkata, jute from Dhubri to Kolkata, paraffin wax from Pandu to Kolkata etc.
  

• 
  Passenger vessel of a private company is successfully running tourist service in NW-2 for last two years between various points in the Dhubri - Dibrugarh stretch. Due to this success this company has constructed one more tourist vessel for plying in NW-2. Another company has built one more tourist vessel for operation in NW-1 and Sunderbans.
  

• 
  An Inland Vessel Building Subsidy Scheme providing 30% subsidy for acquisition of inland vessel by entrepreneurs for operation on three national waterways and Indo- Bangladesh Protocol route has been started operation w.e.f 1^st April, 2002.
  

Efforts are being made to encourage private sector to invest in IWT mode for ownership and operation of IWT vessels. Under this initiative, formation of one joint venture for construction and operation of fly ash jetties at Bandel, Kolaghat and Budge-Budge on NW-1 in West Bengal has reached to the stage of signing of MoU between IWAI and the promoter. In addition, bids have been received for formation of joint ventures for ownership, operation and management of barges for transportation of cargo between Dhubri –Kolkata, Pandu-Kolkata, Dibrugarh – Kolkata and Kolkata – Mongla and these were being examined by IWAI.

Efforts are also being made to develop a composite project for transportation of 3-4 million tonne coal of NTPC annually by IWT mode from Haldia to Farakka on PPP basis.

1.4.4 New National Waterways under consideration
Declaration of 3 more waterways as national waterways is under active consideration. These are: Canal system from Kakinada to Pondicherry integrated with Godavari and Krishna rivers (1095 km), East Coast Canal integrated with Brahmani river and delta of Mahanadi river (623 km) and Barak river in Assam (152 km). Salient features of these waterways and their status (as in Sept.,06) is given below in brief:-

1.4.1 National Waterway – 4

Kakinada – Pondicherry canals along with rivers Godavari & Krishna – 1095 km Cost of the project - Rs. 542 cr

Period of development - 5 years from declaration
The Union Cabinet has accorded “in-principle” approval for the declaration proposal in its meeting held on 24^th August, 2006 and for introducing the Bill before both Houses of the Parliament. The Bill is expected to be placed in Parliament during the winter session of 2006.
1.4.4.2 National Waterway – 5
East Coast Canal along with rivers Brahmani & Mahanadi delta – 623 kms
Cost of the project - Rs. 1526 cr

Period of development - 9 years from declaration

The Union Cabinet has accorded “in-principle” approval for the declaration proposal in its meeting held on 24^th August, 2006 and for introducing the Bill before both Houses of the Parliament. The Bill is expected to be placed in the Parliament during the winter session of 2006.
1.4.4.3 National Waterway - 6
Barak river (Lakhipur-Karimganj Lafasill stretch)- 152 km
Cost of the project - Rs. 46 cr

Period of development - 4 years from the date of declaration

IWAI has proposed to consider a truncated portion of Barak river between Bhanga and Lakhipur (121 km) for declaration since 31 km portion of the river between Karimganj (Lafasill BSF Camp) and Bhanga forms the international boundary between India and Bangladesh, which requires inter-ministerial consultations by Dept of Shipping.
1.4.5 National Inland Navigation Institute



The National Inland Navigation Institute (NINI) has been constructed by IWAI at Patna through CPWD. The institute started functioning from Feb. 2004. Under a MOU with IWAI, Indian Institute of Port Management (IIPM) conducts trainings courses in this institute. Since Feb. 2004 the courses are being run continuously and up to June 2006, 462 candidates were trained in it.
1.5 Technical Studies

Several studies have been taken up during 10^th Plan. Some of these have been completed while some are in progress at various stages. The studies which have been completed are; (a) Extension of Kakinada - Mercaunam canals upto Pondicherry, (b) hydrographic survey in Tizu river in Nagaland, (c) hydrographic survey in rivers Gomti and Haora in Tripura,(d) bathymetric and land survey at 15 sites on NW-1 and 11 sites on NW-2 on request of ADB, (e) collection of data on cargo movement in the organized and unorganized sector in national waterways,(f) CSEZ terminal at Kakkanad in NW-3, (g) EIA/EMP study for extension of NW-3,(h) TEF study of Kovalam-Kolachal stretch of West Coast Canal,(i) hydrographic survey in Subansiri river,(j) hydrographic survey in Sunderbans and (k) economic benefit due to IWT movement by fixed schedule service in NW-1. Besides, new studies for (a) development of Narmada, (b) DPR for Kakinada-Pondicherry waterway and its (c) EIA/EMP study and (d) DPR for East Coast Canal and its (e) EIA/EMP study are in progress.

1.6 Inland Vessel Building Subsidy Scheme

The Govt. has approved an Inland Vessel Building Subsidy Scheme under which 30% subsidy is payable to the entrepreneurs for construction of inland vessels built in India for operation in national waterways, Sunderbans and Indo-Bangladesh Protocol routes. This scheme is valid upto March, 2007. This is an important development in the field of IWT and it is expected that the ownership and operation of inland vessels by the private sector will increase, which is a critical requirement for development of this sector. Response to this scheme has been good and in-principle approval for construction of 32 vessels and one dredger had initially been accorded so far. However, only five vessels are reportedly under construction. It is expected after 3 national waterways getting fully functional by March, 2008 only the private sector will come up in a big way to acquire more vessels. At that stage the importance of this scheme will actually fructify in physical terms. Considering this IWAI has proposed to the Dept of Shipping for extension of validity of this scheme upto March, 2025.

1.7 External Assistance - Project Preparing Technical Assistance (PPTA) by ADB

IWAI had prepared proposals of development of 9 waterways and forwarded these to World Bank and Asian Development Bank (ADB) with a view to obtain External Assistance for IWT development in India.

Both World Bank and ADB responded positively to these proposals. ADB also agreed for a Project Preparing Technical Assistance (PPTA) for updating the studies of these waterways made by IWAI and to prepare specific projects for ADB assistance.

A PPTA of US $ 1.125 million was sanctioned by the ADB in February, 2002. Under this, desk studies were made by a Consultant appointed by the ADB for updating various feasibility reports and other material available in respect of the three National Waterways, Sunderbans waterway, Brahmani- Mahanadi- ECC system, Kakinada- Mercaunam canal and rivers Godavari and Krishna system, river Barak, DVC Canal and NW-3 extension. After the first phase of this study, the ADB’s consultant had identified three stretches of waterways to be studied in detail under the second phase. These are: (i) Haldia- Patna stretch of NW-1, (ii) Bangladesh Border- Dibrugarh stretch of NW-2 and (iii) River Brahmani.

Phase-II of the study for identification of specific projects was also completed in 2006 and draft report of phase II was submitted by the consultant in Aug/September 2006. IWAI and ADB had given detail comments on this draft report. Final report of phase II was not received in IWAI till mid-November, 2006.

In the phase II draft report, the consultant has not made any study of Brahmani-Mahanadi – ECC system stating that due to some technical reason this waterway was not viable as of now but can be studied at later stage. Thus, in phase II report they studied Haldia-Patna stretch of NW-1 and Dhubri-Dibrugarh stretch of NW-2 only.

To facilitate this study by the consultant of ADB, IWAI had provided counterpart funding by way of facilities to the consultant such as office space in IWAI Head Office, vehicles for their conveyance in Noida/Delhi as well as during their field visits, computer facilities etc as requested by ADB. In addition, to facilitate detailed study by the consultant for suggesting river training works on NW-1 and 2 detail bank to bank flood season survey of 15 locations on NW-1 and 11 locations on NW-2 was carried out by IWAI.

During the informal discussion IWAI had with ADB officials during September 2006, it was understood that ADB was willing to provide loan on ‘normal interest rates’ while Govt. of India may consider taking such loan only on ‘preferential interest rates’. Due to this, though initially ADB had tentatively made plans to provide loan up to US $ 300 million (in two phases of US $ 150 million each), no further progress on actual funding by ADB could be made so far.

1.8 Raising of Bonds by IWAI

An amount of Rs 136 crores was envisaged by way of raising money from market by IWAI through bonds. However, no efforts to raise money from the market were made by IWAI during the 10^th Plan since IWT sector has not developed to an extent that return on investment may be possible for servicing of the bonds, and secondly, IWAI could not even utilize the budgetary grants it got from the Govt. on year to year basis during 10^th Plan. Hence need for raising money from the market was not felt and neither was it a feasible proposition.

1.9 Private Sector Participation

An investment of Rs 92 crores was envisaged under Private Sector Participation.

With a view to promoting inland water transport mode, Government of India had approved in 2001, an Inland Water Transport Policy which includes fiscal concessions, and policy guidelines for development of this mode and to encourage private sector participation in development of infrastructure and ownership and operation of inland vessels.

In order to explore the possibility of joint ventures and BOT projects in IWT sector, interaction was held with many interested firms. Thereafter, through a consultancy firm priority projects were identified, and bids were invited for 11 Joint Venture projects – 5 projects for construction and management of IWT jetties on NW-1 and 6 projects for acquisition and operation of barges on identified origin-destination pairs in NW-1, NW-2 and NW-3.

For projects of construction of jetties, response was received for three projects for jetties for fly ash handling at Bandel, Budge-Budge and Kolaghat in West Bengal. These projects have been processed and thereafter approved by IWAI Board. Equity sought from IWAI for these three projects is about Rs. 7.50 lakh only. After obtaining clarification from the Dept of Shipping about competency of IWAI for formation of JV company, IWAI issued sanction letters to the successful bidder (promoter) and has signed the MoU thereto.

For projects for acquisition, operation and management of barges, response was received for four projects. Out of these, single bid received for one project was rejected on technical grounds while bids for remaining three projects are under process. Equity sought from IWAI for these three projects is of the order of Rs 10.94 cr.