New Delhi || 14-12-2024
Union Minister of Ports, Shipping and Waterways, Sarbananda Sonowal to launch a Cargo Promotion Scheme with flagging off a Cargo Ship from GR Jetty of Kolkata on 15 December 2024.
The objective of the Scheme is to encourage modal shift of cargo to Inland Waterways Transport (IWT) mode by incentivising such shift and demonstrate the reliability as well as readiness of the IWT sector for the purpose of boosting confidence of the stakeholders.
The IWT sector, unlike ports, is in growing stage and requires support to promote modal shift of cargo, in addition to creation of physical infrastructure. While the cost of transporting cargo on the waterways itself is less compared to other modes of transport, the multi modal nature of the transport makes the total logistics cost higher than other modes of transport.
Even in the developed part of the world like Europe, programs like Marcopolo were launched to provide financial support for modal shift of cargo to waterways.
The budget of IWT sector is less than 1% of road/railways. A scheme for providing 35% incentive to promote the utilization of inland waterways transport sector by cargo owners and for establishing scheduled service for cargo movement on National Waterways-1 (NW-1), NW-2 and NW-16 via Indo Bangladesh Protocol route has been approved by the Government of India.
This scheme is expected to divert 800 million tonne Km cargo on IWT mode, which is nearly 17% of the current cargo of 4700 million tonne Km on NWs. The scheme is currently proposed at a cost of less than Rs 100 Crore for three years and can be scaled up or modified depending on the success of the scheme.
The scheme is “Incentives to Promote the Utilization 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” have two different components to address the two specific needs of the IWT sector.
First component is to providing incentives directly to the cargo owners (except for the cargo operated under Inland & Coastal Shipping Limited (a wholly owned subsidiary of SCI) for sustainable modal-shift of cargo from Rail/ Road to IWT mode to the extent of 35% of total actual operating expenditure incurred on waterways journey.
The second component is Scheduled Services by Inland & Coastal Shipping Limited (ICSL) with funding by IWAI to ICSL to demonstrate the reliability of IWT mode for promotion of IWT for the IWT vessel operated by ICSL. Currently, the Scheme will be restricted only to NW-1, NW-2 and NW-16 via Indo Bangladesh protocol routes, as there is a lot of potential for growth of traffic. However, based on the success of the Scheme, it may also be extended to other waterways.
Road transport dominates the sector, accounting for approximately 65% modal share followed by rail at 26% modal share. In contrast, Inland Water Transport (IWT) has only a 2% share in India’s overall freight movement.
So this initiative by Ministry of Port, Shipping and Waterways (MoPSW) providing financial support to nudge cargo owners for modal shift to waterways can prove a landmark to compete with much better funded and developed road and railways sector.
