Govt plans incentive to shift cargo transport from roads to waterways
Shipping ministry plans to give firms incentive of Rs1 per tonne per km; move may cost ministry Rs100-150 crore a year
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New Delhi: The shipping ministry plans to offer companies an incentive of Rs.1 per tonne per km to transport goods, including foodgrain, automobiles, cement and other commodities, through inland waterways and coastal shipping.
The proposal has been discussed with stakeholders in the transport industry and would soon be presented before the cabinet for its approval.
“It is not a subsidy but an incentive being given to the industry for switching to cleaner transportation like inland waterways and coastal shipping from railways and roadways,” a shipping ministry official said on condition of anonymity.
With the infrastructure available at present, the incentive offer would cost the shipping ministry Rs.100-150 crore per year during the initial years.
At present, just 6% of freight transported in India is carried by coastal shipping and inland waterways; the comparative share in Germany and China is 11% and 24%, respectively.
Road freight accounts for 54% and railways 33% of the cargo transported in the country, with the remaining 7% sent through pipelines.
A shift from roads and railways to coastal shipping and inland waterways could lead to emission savings of about 3.5% in the freight transport sector, says a shipping ministry presentation.
It also suggested a reduction in the cost of coastal shipping by changing the so-called cabotage law, under which only Indian-registered ships are allowed to ply on local routes for carrying cargo.
The presentation said that the proposed incentive would also help to increase transportation of petroleum, oil and lubricants (POL), coal, steel and cement by coastal shipping from 6 to 12% in a span of a decade and result in potential savings of Rs.35,000-40,000 crore by optimizing export-import freight and domestic cargo.
The government has envisioned increasing the share of waterways transportation from 6% to 10% by 2020.
To reach this target, the shipping ministry will now take several steps like moving to larger barges and use of liquefied natural gas instead of diesel barges and dedicated berths, bunkering and storage capacities at relevant ports for commodities to be transported through coastal and inland waterways.
The ministry would also suggest the imposition of green taxes on less environmentally friendly modes of transport such as roadways.
Additional secretary of shipping Alok Srivastava declined to comment on the proposals which he said were still being finalized.
“We did hold a workshop today with all stakeholders and they were quite clear that financial incentives need to be granted to the freight owners to provide a level-playing field for water transportation,” he said, without elaborating.
According to the shipping ministry, transportation by waterways would cost 25 paisa per km, by rail and road it’s Rs.1.50 and Rs.2.50, respectively. In terms of fuel efficiency, too, waterways compare favourably: one horsepower can ferry four tonnes of cargo by waterways, while the equivalent is 150kg and 500kg by road and rail, respectively.