IWAI taps private shipper for service

Two joint venture companies to manage NW1 & NW2.

For the first time in the history of state-run Inland Waterways Authority of India (IWAI), two joint venture companies have been formed with a private partner to exploit the inland waterways for large scale cargo transportation.

Mumbai-based SKS Ship has signed a memorandum of understanding (MoU) with IWAI for forming two joint companies, Royal Logistics and Sunderban Waterways, for carrying on the business of construction and management of small ships to be operated in National Waterways No 1 and No 2.

National Waterways No 1 is river chain between Haldia - Allahabad (1620 kms) while National Waterways 2 is Dhubri - Sadiya (891 kms).

But what is so great about this joint venture? Once operational, items such as tea, bitumen, jute and jute products, iron and steel and POL products etc could be transported to long distances up and down the river streams at highly economical costs.

Says Sarvesh K Shahi, Chairman and Managing Director, SKS Ship, "For instance Assam tea can be transported by inland waters in barges skipping rail and road at cheap cost. Tea can be picked up from Pandu jetty and ship it to either for Haldia for exports or Kolkata for domestic supply."

"The transportation via inland waterways will save you 25 per cent during initial period. But once you have assured cargo to and from, one can cut cost upto 35 per cent. We are planning to deploy 14 vessels for this first of its kind project with government," says Shahi.

The routes which will cover under this project include river chain between Kolkata "� Pandu (with 8 vessels) and between Kolkata "� Mongla--Bangladesh (with 6 vessels). The capacity of the vessels will be upto 2000 metric tonne cargo carrying capacity. These vessels can typically carry 97 twenty foot containers besides oil product and other break bulk items.

The total cost for building vessels alone is estimated at Rs 100 crore. IWAI will pick up 30 per cent stake of this project while remaining would be SKS Ship. As per the stipulated conditions, the government will provide 30 per cent subsidy and there will be a tax holidays and other benefits like duty free imports of equipment, machinery, and plants for the construction of the vessels. The joint venture company of Kolkata - Pandu route will be known as Royal Logistics and Kolkata-Mongla route venture would be known as Sunderban Waterways. The number of directors for the Joint Venture Company shall be minimum of five, two from IWAI including the Chairman and three from SKS Ship which includes the Managing Director.

National Thermal Power Corporation (NTPC) has also recently shown interest in transportation of 3-4 million tonne of coal per year from Haldia to Farakka by IWT mode. Efforts have been initiated to prepare feasibility report for this as a public-private partnership project.

"With a view to provide an impetus to development of inland water transport mode, the government has approved Inland Water Transport Policy which includes several fiscal concessions, and policy guidelines for rapid development of the mode and to encourage private sector participation in development of infrastructure and ownership and operation of inland vessels. IWAI is also authorised for joint ventures and equity participation in BOT projects," a senior Shipping Ministry official said.

IWAI has short-listed 17 priority projects. Bids have been invited for 11 projects which include 5 projects for construction and management of jetties on NW-1 and six projects for acquisition and operation of barges in NW-1, NW-2 & NW-3, that are under process.