Gadkari moots port subsidiaries to promote inland waterways

Union minister for shipping, road transport and highways Nitin Gadkari has asked major ports in the country to set up inland waterways subsidiaries to make use of the vast network of rivers and canals, stretching about 14,500 km, for moving goods.

Gadkari said the ports will leverage dollar-denominated billing to raise low-cost money, adding that he has also written to the finance ministry to allocate 5 per cent of the corpus coming from the cess on petrol and diesel for building inland waterways.

"My ministry's total budget is Rs1,800 crore and it is not possible to undertake the inland waterways projects within that," Gadkari told reporters on the sidelines of the annual Indo-American Chamber of Commerce meeting in Mumbai.

He said the Jawaharlal Nehru Port Trust (JNPT), the country's largest container port, has already started work on developing subsidiaries for developing waterways in seven to eight rivers in Maharashtra, Madhya Pradesh and Goa.

He said JNPT will be raising cheaper forex credit against its annual foreign currency billing of over Rs4,000 crore.

Nearly Rs50,000 crore in low-cost borrowings can be raised by JNPT alone through the receivables, he said, adding the ministry has decided to ask other ports to start similar subsidiaries.

He said the shipping ministry has also asked the finance ministry to part with 5 per cent of the overall petrol-diesel cess for inland waterways.

At present, the cess is being utilised for railway and road development (both at the centre and states level), he said, adding, this could well be used to fund inland waterways being developed under the Jal Marg Vikas plan funded by the World Bank as well.

The centre collects an average Rs8,000 crore a year through a Rs2 cess on each litre of petrol and diesel since 2000 to part fund national highways and the money is parked with Central Road Fund.

The country has a vast network of rivers and canals stretching over 14,500 km, he said adding that the funds collected through cess on motor fuels could be used to develop waterways as well.

The government has already approved developing 106 new inland water transport projects spread across 24 states as national waterways in addition to the five existing networks after the National Waterways Bill 2015 was approved by the Lok Sabha during last the winter session.

Currently, cargo movement along the five existing national waterways totalling 4,434 km is not even 3 million tonnes a year, or a paltry 3 per cent of all cargo movement in the country.

The government is also looking at a hybrid model to develop inland waterway projects on a PPP model, wherein private parties will undertake development and will be allowed to charge a user fee, Gadkari said today.

Shipping Corporation chairman and managing director B B Sinha said his company has already started a wholly-owned subsidiary to focus on inland waterways on the East Coast.

The new company, to be headquartered in Kolkata, will be given a loan of around Rs1 crore to buy or hire vessels to operate in the Kolkata-Varanasi/Kolkata-Guwahati routes, the minister said.

Gadkari said he is meeting finance minister Arun Jaitley on 26 August to present a 'car scrapping policy' as part of the port-led development initiatives.

The policy is aimed at taking advantage of the mandate to switch to Euro VI emission norms by April 2020, which will result in large scale scrapping of vehicles, he said.

The minister claimed the auto industry's revenue can zoom to Rs20,00,000 crore from the present Rs4,50,000 crore as a result of such a policy implementation.

Gadkari said the government is finalising orders of up to Rs50,000 crore to be given to 27 ailing shipbuilding yards, which are passing through difficult times.

The ministry will also be introducing a bill in the next session of Parliament to abolish the Tariff Authority for Major Ports (Tamp), Gadkari said.

He said the government has already formed a company to handle works of over Rs12,00,000 crore under the ambitious Sagarmala project, aimed at modernising ports.