If financial literacy is low, logistics literacy is even lower in India. When Atal Bihari Vajpayee launched the Golden Quadrilateral project in 1999, many saw ‘jumla’ in it. Naturally, few appreciated the Narendra Modi government’s thrust on inland water transport (IWT), over and above road, rail, sea and air.

However, IWT has started opening doors to cheaper and efficient multi-modal logistics boosting economic growth. The opportunities will only get bigger as India completes Kolkata-Varanasi (National Waterway-1) Jal Marg project in March 2023. It will ensure all-weather navigability, with a minimum draft of three metres. A similar project is underway between Kolkata and Guwahati, through Bangladesh.

Impact On Bangladesh Trade

In August, the central government-run Kolkata Port Trust handled one trainload (3,000-3,500 tonne) of rice, wheat and maize — arriving from states in north and central India — six days a week for the entire month. The cargo was sent by barges to Bangladesh. The supplies were a tad slower in September but will be scaled up to two trainloads a day from October onwards.

Foodgrains were previously sent by train to Benapole (the Bangladeshi side of the Petrapole border roughly 70 km from Kolkata). The average turnaround time to complete unloading and return to Kolkata was as high as seven days. Naturally, it was uneconomic to Indian Railways.

Multi-modal logistics proved a win-win. Railways is benefitted by the quick return of empties. Bangladesh is benefitted as rice or maize is reaching Dhaka (Narayanganj) by the river even before they could complete unloading the rake at Benapole. Kolkata port is earning some extra revenue. But the trade cost remains lower and speed is faster.

Corporates have also started experimenting with new avenues. A top steelmaker in Jharkhand recently entered a contract to send HR (hot rolled) coils to Bangladesh by train-IWT combo. Previously, such consignments were taken by road via the congested Petrapole land border, where cargo takes weeks to cross the gate.

Will Help Nepal And Bhutan

India-Bangladesh has had a protocol river transport route since 1975. However, its use was limited to fly ash imports by Bangladesh, due to lack of facilitation. The route to Karimganj in Assam (through Bangladesh) was barely used due to low navigability and high turnaround time.

Over the last few years, India and Bangladesh extended the protocol route to Dhaka and Ashuganj (on the Tripura border). Terminal facilities are coming up in Ashuganj and Jogighopa (Assam). Dredging is initiated, between Sirajganj and Daikhawa in the Bangladeshi part of Brahmaputra, to ensure all-weather navigability. The projects in Bangladesh are mostly India-funded.

To put it into perspective, India is building two IWT axis centring Kolkata. The waterway to the North East has two branches to Assam and Tripura respectively. The Assam route will facilitate both domestic, bilateral (North East-Bangladesh) and regional (Bhutan-Bangladesh) cargo. A multimodal terminal is under construction at Jogighopa (Assam) to facilitate regional trade.

If Kolkata becomes the nerve centre of the IWT and multi-modal activity, Kolkata-Varanasi waterway (NW1) will be the prime artery of growth. It will restore navigability in the Ganges — which was a popular mode of the cargo movement in the pre-Independence days — and connect landlocked Jharkhand, Bihar and Eastern Uttar Pradesh with Kolkata port.

That’s not all. NW1 will open cheaper multimodal transport opportunities to Nepal’s import trade both from India as well as from third countries. From Patna (Bihar) and Sahibganj (Jharkhand) terminals, the top India-Nepal gates of Raxaul-Birgunj and Jogbani-Biratnagar are barely 200 km away with both rail and road options available.

Nepal imported $12.3 billion (ITC Trade Map) worth of goods in 2019 of which $7.7 billion were from India. Third country imports are mostly routed through Kolkata port. However, as a river port, Kolkata suffers from cost-inefficiency. Efficient transit of goods will be a win-win.

Questions Remain

The Kolkata-Varanasi Jal Marg project is on schedule. Apparently, IWAI did a commendable job by reducing project cost by 30 per cent (Rs 1,600 crore) from the originally estimated Rs 5,369 crore. This has led to $57.78 million less utilisation of the World Bank loan of $375 million.

The majority of the on-ground facilities (except a new lock at Farakka barrage) are ready. Kolkata terminal is witnessing rising cargo for Bangladesh. Varanasi and Patna terminals were inaugurated years ago. Sahibgunj and Haldia facilities are receiving final touches.

However, the project may not be free from problems.

The Jal Marg project was expected to ensure viable movement of cargo, which depends on both tonnage and speed. At the three-metre assured draft, large vessels (of above 2,000 tonne) can give road and rail a run for their money. Navigation safety, removal of obstructions and modern cargo handling facilities will bring speed.

Sadly, there is no proof that IWAI has met these objectives. Though the project is in an advanced stage of implementation, there is no movement of commercial-scale cargo on this route, particularly on the Farakka (West Bengal)-Varanasi stretch.

Development of a new business ecosystem takes time. But it is questionable if IWAI did enough to instil confidence among prospective users. The inaugural vessel flagged off by the Prime Minister from Varanasi in November 2018, was reportedly carrying low tonnage cargo requiring less draft.

In March 2019, one barge operator tried bringing stone aggregates from Sahibgunj to Kolkata via-Farakka. On paper, IWAI assured him of a minimum 2.5-metre draft. But unofficially, he was asked to restrict load so that the vessel doesn’t require more than a 1.6-metre draft.

Operators say, commercially viable movement from Kolkata to Varanasi is questionable due to lack of draft at Farakka and Patna (1.5-1.7 metres) in lean season and height restrictions, during monsoon, at Vikramshila bridge near Bhagalpur. A pontoon bridge near Patna creates an added problem.

There is no way to validate the fact. Two years ago, IWAI offered four above 2,000 tonne (specially designed to run on Ganga) vessels on lease to users, apparently to demonstrate the viability of the Varanasi-Kolkata waterway. Two of the vessels ran on the Kolkata-Bangladesh route and the rest two idled.

Not much is known on navigational safety either. IWAI mandated vessels to have an automatic identification system (AIS). Kolkata Port is also keen on the project as it directly involves their operational safety. However, at least 60 per cent of vessels, mostly Bangladeshi, on the Kolkata Bangladesh route didn’t install it.

Vested Interests Working?

Introducing efficient logistics options is not easy, particularly in the stale economic and political environments of eastern India. West Bengal, which should be the biggest beneficiary of the project, has little interest in it. It is difficult to say what interests Bihar and why they continue with a pontoon bridge on Ganga in 2021.

The situation is best utilised by vested interest groups (the trucker lobby in Assam tried its best to derail the rail connectivity project to Agartala in the past). They operate through media and the 'environment' is the most preferred tool.

The pattern is noticeable in the case of Jal Marg too. A series of articles referred to Jal Marg as a vehicle for corporate growth at the cost of marine ecology in Ganga.

The truth is: Jal Marg is merely restoring the centuries-old navigational channels on Ganga. Rivers are made for transport. Higher traffic helps keep the channels open, reducing the need for dredging. IWT constitutes 20 per cent of the transport sector in Germany, as against 0.15 per cent (ADB, 2007) in India. Does it mean, Germany is less concerned about the environment?

In this situation, IWAI must play the role of a responsible facilitator. They are entrusted with the opportunity to open a new era in transportation in India. The success of the Jal Marg project will be key to unlocking growth potential in the entire eastern neighbourhood.

It is time they come clean on the progress of the project and establish commercial viability.

Jal Marga

Get Swarajya in your inbox.