Bank finance for private sector to develop inland waterways soon
12 May 2018
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The Inland Waterways Authority of India (IWAI) will involve banks for ensuring availability of financing options for private sector operators in inland water transport (IWT) sector.
Financing and funding for operation and maintenance of IWT assets is a major constraint for shippers, vessel operators and asset management firms as banks are not yet ready with any customised financing option for the sector.
Addressing the day-long stakeholders conference on emerging business opportunities in inland water transportm IWAI chairperson Nutan Guha Biswas said that banking finance was needed for private operators to participate in this newly emnerging transport sector.
She said a lot of investment are being made to develop the waterway sector which would complement railways and roadways.
"We have started working on eight new national waterways, in addition to five others on which work had been on in full swing.
Rajat Sachar, advisor, ministry of shipping, invited private operators to suggest policy changes to make Inland water transport an active sector.
Referring to the Jal Marg Vikas Project being implemented between Varanasi and Haldia on the Ganga, Sachar said the government would invest Rs5,369 crore on one national waterway.
He also reached out to financial institutions to offer products for private sector investment in IWT sector where annual government funding has increased 12- fold in the last four years.
Bank of Baroda's manging director and CEO PS Jayakumar said that banks could provide flexible schemes for financing, like providing a moratorium period for loans on existing as well as the new projects. He added that issuing bonds could be an alternative source for long-term loan capital financing for vesel owners.
The government is developing national waterways as a key transport intervention, as part of an integrated transport network strategy, to help correct the transport modal mix that imposes huge logistics costs on the Indian economy. At present the costs of logistics in India, at 15 per cent of GDP, is about twice of that in the United States.
