India’s Shipping Ministry has notified a Rs 100 crore scheme to incentivise inland waterways transport (IWT). The scheme also provides sops for starting Scheduled Services for Cargo Movement on National Waterway (NW)-1, NW-2 and NW-16.
“The IWT sector is in nascent stage and requires support to promote modal shift of cargo, in addition to creation of physical infrastructure,” the Ministry of Ports, Shipping, and Waterways said in a note.
Media reported on August 15 that government could offer financial support for the movement of goods on inland waterways, as part of its efforts to promote greater use of the country’s network of rivers, canals and backwaters to move cargo.
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.
This scheme provides a 35% incentive to promote the utilization of inland waterways transport sector. According to official estimates, the scheme is expected to divert 800 million tonne Kilometre cargo on IWT mode, supplementing the 4700 million tonne Kilometre cargo already on waterways. This scheme will be valid for three years and can be scaled up or modified depending on its success, the ministry added.
There are two scheme components. The first provides incentives directly to the cargo owners for sustainable modal-shift of cargo from Rail or Road to IWT mode to the extent of 35% of total actual operating expenditure incurred on waterways journey. The second component subsidies operations of Scheduled Services by Inland & Coastal Shipping Limited (ICSL) to demonstrate the reliability of IWT mode.
“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,” the ministry said.
