New Delhi: The government has asked the Inland Waterways Authority of India (IWAI) to develop so-called freight villages, a concept borrowed from European countries. The state-run IWAI will also provide inland waterways connectivity to these logistic hubs. In an interview with Mint, IWAI vice-chairman Pravir Pandey talks about freight villages, the World Bank-backed National Waterways 1 (NW1) project on river Ganga and the engineering marvels being created along waterways. Edited excerpts:

What are freight villages?

A freight village is an area where all activities relating to transport, logistics and the distribution of goods both for national and international transit are carried out by various operators. The concept has been widely used in European countries and (is) completely new to Asia. In fact, India will be the first country in Asia to come up with a freight village.

We are building the first freight village in Varanasi in Uttar Pradesh. The village will provide connectivity through all three modes of transportation. Road, rail connectivity through Eastern Dedicated Freight Corridor, and water connectivity through the country’s longest waterway NW1. Another freight village is also coming up at Sahibganj in Jharkhand.

How will the freight villages change logistics?

IWAI is acquiring extra land of around 100 acres along the multimodal terminals of Varanasi and Sahibganj. We will just develop basic infrastructure. Private sector would be asked to establish their units where they can manufacture, pack and export or transport their products. It will reduce last-mile connectivity cost substantially. We already have several FMCG players, including Patanjali, many logistics companies and international companies who are keen to develop their units in freight villages, although I cannot name them right now. In fact, freight villages will change the logistic narrative of India.

Do you think inland waterways will get a chunk of transportation share?

Inland waterways are going to change the transportation dynamics in India and IWAI is fully preparing for it. We have hired a German firm to design vessels especially for Indian inland waterways and they have come up with 13 designs, which can run in low draft and have high carrying capacity. Our designed vessels can carry up to 2,000 tonnes of cargo, which is equivalent to 140 trucks or a full railway rake. These designs have been tested and cost around ₹ 15crore (in total). Despite being an intellectual property right of the Indian government, from June onwards, it will be in public domain free of cost for ship owners to manufacture these and run in Indian waterways.

Several trials for cargo transportation like cement and automobile, have been conducted and companies are quite happy with the performance. They are keen on using waterways and are waiting for them to be operational soon. Following trials, we have got several other requests from various sectors who would like to transport their products through waterways.

Critics are sceptical about inland waterways with low water and dying rivers.

I would differ with them here. Inland waterways are going to introduce the concept of room for rivers in India and help them to rejuvenate. We are going to introduce maintenance dredging and have already changed its whole concept. Now, we are giving full stretches of 100km and above for dredging for 5 to 7 years where the company will be responsible for maintaining 3 metre depth and 45 metre width of river. It’s a bit more expensive but we have transferred our risks to the private sector. If the vessels cannot pass, then no payment to the contractor. The first such project worth Rs150 crore has been awarded to Adani Ports and SEZ.

Also, one needs to understand that inland waterways are not like roads that can be constructed overnight. It will take 15-20 years for inland waterways transportation to get matured. If you imagine what will be the rail and road situation after 20 years, you will realise how waterways will be helpful. Besides, we have a special focus of running inland waterways vessels on methanol, so that it is environment-friendly and has the support of NITI Aayog too.

Are there any engineering marvels being constructed in India’s inland waterways?

This whole Jal Vikas Marg project is worth Rs5,369 crore or $800 million. Half of it will be borne by World Bank and the rest by the government of India. Under the National Waterway 1, there are several engineering marvels that are coming up. But the best one is the navigation lock at Farakka which would be India’s Suez or Panama canal. It is a challenging engineering project which will be inland waterway’s engineering marvel.

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