New Delhi, Oct 9 (IANS) The government should provide Rs.5.1 billion ($112 million) as viability gap funding to help fully realise socio-economic benefits of inland waterways transport (IWT), leading think tank National Council for Applied Economic Research (NCAER) has suggested.
In a new study released Monday, NCAER stated that since 'the role of IWT in social development can be noteworthy, the government needs to provide Rs.5.1 billion as 'viability gap funding' until the cargo volume increases to the financial break-even level'.
Viability gap funding is used to bridge any possible shortfall in funds for any project.
IWT forms a small part of the total transport network of the country though it is energy efficient, economical and environment-friendly.
The current share of cargo movement by the national waterways in India is very limited. The National Waterways 1 (NW1) between Patna and Haldia and the National Waterways 2 (NW2) between Dhubri and Sadiya currently carry a total cargo of around 0.78 million tonnes.
The primary reason for the low share of the IWT traffic is that it is confined to specific regions, and is effective only when both the origin and the destination of the production and the consumption centres are located on the waterfront.
The current transportation demand of IWT of selected commodities like steel, coal, cement, fly ash and fertilizer is 0.17 billion tonne-km, according to 1999-2000 data.
This is expected to increase to 1 billion tonne-km by 2010-11 and to 1.3 billion tonne-km by 2020-21, states NCAER.
The study estimates the total potential demand for all commodities for transportation by the IWT mode at 6 billion tonne-km by 2010-11 and 7.7 billion tonne-km by 2020-21, provided the navigational hazards like shallow waters or inadequate depth, siltation and bank erosion are attended to.
'There was scepticism that IWT would not be the preferred transportation mode on account of the longer time taken for transportation of goods or the tariff that would be levied on the bulk movement of cargo through IWT,' states NCAER.
'Contrary to this belief, the major existing and potential users see this as a mechanism for maintaining a buffer stock or a 'mobile inventory' through pre-scheduled dispatches at regular intervals.'
In addition, IWT provides the benefit of higher fuel efficiency, lower pollution and larger employment generation, stated NCAER.
'Water transport is also the safest mode of transporting large quantities of chemicals and toxic materials with the least danger to the surrounding cities,' said the study.