Potential for Economic Gains from Inland Water Transport in India

Even though India has 14,500 km of navigable waterways, inland water transport (IWT) plays only a marginal role in the transport sector. Although the total cargo market in 2000 was 1,000 billion tonne kilometers, cargo movement by IWT was only about 1.5 billion tonne kilometers (i.e., a modal share of 0.15%). In India, IWT has great potential as an economical and eco-friendly mode of transport, if the necessary infrastructure investment is made in fairways, terminals, vessels, and navigational aids. A pilot study was conducted on two major national waterways, NW1 (Ganges–Bhagirathi–Hoogly River system) and NW2 (Brahamaputra River system) to determine the viability of such investments, in terms of not only financial but also potential economic gains. Certain tangible gains were quantified along with intangible social and environmental benefits. Measured as economic internal rate of return (EIRR), the project feasibility was determined to be 17%, with a positive net present value of Rs 2,290 million (1 Re = $0.025 in 2007 U.S. dollars) and a benefit–cost ratio of 1.81 at a 10% discount rate. Thus, this project also meets the World Bank norms for feasibility of public utility projects (i.e., an EIRR of 5% or more). These findings reinforce the conclusion that the government of India should undertake rapid and massive efforts for national IWT development in its 10th and 11th Five Year Plans.