India is blessed with an extensive network of inland waterways in the form of rivers, canals, backwaters and creeks. Of the 14,500 km long network, about 5200 km is made up of navigable river routes, while 4000 km network constitutes of canals that can be used by mechanised crafts. Freight transportation by waterways is highly under-utilised in India when compared to developed countries like the United States, China and the European Union. The total cargo moved (in tonne kilometres) by the inland waterway is just 0.1 per cent of the total inland traffic in India, compared to the 21 percent for United States. In India organised transportation is confined to handful of waterways in Goa, West Bengal, Assam and Kerala.
As rail and road infrastructure is already falling short in meeting the growing demands of transport sector, inland water transport seems like an immense opportunity. And indeed, it is, if we utilise the resource judiciously. If we take cues from the challenges that the manufacturing industry is facing when it comes to road and rail transport.
The Narendra Modi government has chalked out plans to develop an inland water transport grid covering about 4,500 km on the lines of National Highways grid. The shipping ministry has put up a proposal involving a rough estimate of Rs 20,000 crore to develop these water routes for transportation of bulk cargo and to bring them up as an alternative mode of transport. Along with getting the waterways ready for sailing commercial vessels and barges, the government should also encourage setting up terminals and riverside warehouses. Unless that is done, the cost saved by water transport will be lost in the additional step of transporting, loading and unloading of the material at far-off storage sites. And where setting up such terminals is not feasible, at least good road connectivity must be provided.
Presently, the cost of hiring barges is not attractive for low margin products like cement, at least not for the short distances routes available. Perhaps, subsidised transport for cement can be considered. The industry too will have to look at ways for maximising barage utilisation by arranging for cargo on return journey. Cement and coal manufacturers may find synergy in joining hands and working in collaboration. Several major cement companies, such as Ambuja, Shree Cement, have already invested in riverside infrastructure and have put down logistical framework to make the best of water transport mode. It seems that the industry and the government is sailing in right direction.