Lukewarm response by private sector in NE waterways

NE waterways not attractive for private sector

The waterways sector in the Northeast is yet to become a commercial success with private players staying away from the seemingly lucrative and cost-effective trade of transporting goods over the numerous rivers criss-crossing in the region.
Both the Brahmaputra and Barak rivers are yet to be commercialised, though the former was declared a national waterway way back in 1988.
Though much has been said of the economics of inland water transport that is more economical and safer than road and rail transport, the sector has not generated much interest in the private sector.
An inland waterways official says the reasons behind the private players’ disinterest in the sector are many — from lack of industries, scarcity of vessels to problems faced while getting clearance for sailing through Bangladesh.
The working group on improvement and development of transport infrastructure in the Northeast for the National Transport Development Policy Committee says: “As inland water transport has not received its due importance in policy and investments so far (investment-wise things look promising for the future), operators with the required fleet size have not emerged either in the private or the public sector. This is the major bottleneck in the promotion of inland water transport. Brahmaputra and Barak rivers have not been fully commercially exploited for transportation purposes. Inland Waterways Authority of India is not an operator. The public sector, Central Inland Water Transport Corporation Ltd, is sick and has squandered away the advantages of fleet strength. The private sector has not emerged due to various policy reasons. Therefore, the challenge here is to create a policy regime that will promote investment in appropriate fleet of vessels in both public and private sectors.”
It said sufficient infusion of funds must be ensured for the sector to take off and suggested investments to the tune of Rs 10,000 crore up to the Fifteenth Plan.
The Northeast has nearly 1,800km of river routes that can be used by steamers and large country boats and the inland water transport departments of both the state and central governments have been trying to improve the sector in the region.
The Inland Waterways Authority had floated tenders for looking for a private partner to run the coal-handling terminal at Jogighopa, but no one came forward.
Numaligarh Refinery Limited, which had used the river route to transport diesel to Bangladesh, also stopped, dealing a big blow to the sector.
Barak has still not been declared a national waterway though the authorities have recommended it.
The working committee called for partnerships between the public and private sectors to improve the development, management and operation of inland water transport. “Capital investment and expertise for the improvement of the waterway network requires development of a structure for public-private partnerships that attracts the private sector and mitigates their financial risks.”
An inland waterways official conceded that not much headway had been made in attracting the private sector, as the incentives may not be good enough. “Transporters are still not accepting the idea that sending goods over waterways is cost effective and safer though it takes a longer time. There has to be public awareness of the economic benefits of the sector in the region amongst all stakeholders, thereby encouraging a shift to water transport where appropriate. Targets of movement of bulk commodities should be quantified over agreed time periods with appropriate incentives.”
The Centre has now taken interest in giving a fillip to private sector investments, especially in moving food grains and coal on Brahmaputra (National Waterway 2). A committee set up under the Prime Minister’s Office has been assigned the responsibility of identifying multiple business models that could then be bid out through concessions. This will be supplemented by designing model concession agreements and other standardised documents for facilitating a rapid scaling up of investments.
The commerce ministry has said an industrial unit located in the Northeast would be eligible for 90 per cent subsidy it if transported goods over the Brahmaputra from Dhubri to Sadiya and thereafter by road to the manufacturing unit.
All other provisions of the transport subsidy scheme will be applicable for deciding the eligibility of an industrial unit for transport subsidy.


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