21/09/2016 8:36 AM IST | Updated 21/09/2016 8:46 AM IST

India's River Czar Wants To Ship A Quarter Of India's Cargo On Water

Congested highways can't cope with the demands of a fast-growing economy

Utpal Baruah / Reuters

The man in charge of turning India's rivers into arteries for transport is pushing the government to force freight onto waterways.

Prime Minister Narendra Modi's administration should require 25 percent of domestic cargo to be ferried on rivers and channels where feasible, Amitabh Verma, the chairman of Inland Waterways Authority of India, said in an interview. Congested highways account for the bulk of freight and struggle to cope with the demands of the fastest-growing major economy, he said.

"You see the pressure on the roads and on the railways," 57-year-old Verma said in his office near New Delhi. Transport across waterways could enable more cargo to be moved, he said.

Verma said fully developing a network of more than 100 navigable channels would cost at least 800 billion rupees ($12 billion). Finding the money is the key challenge. The goal of better using rivers such as the holy Ganges to transport everything from coal to cars is decades old, but they still move very few goods. Central government outlays on waterways in the two fiscal years ending March 2017 amount to less than 1 percent of Verma's estimated bill.

How India will bridge the gap is unclear. Verma said state-run Inland Waterways is getting some funding from bodies such as the World Bank, and plans to issue 10 billion rupees of bonds by February. Other options -- such as public-private partnerships, joint ventures with local governments, or tapping the money raised by a tax on fuel -- haven't progressed much.

Proponents of river transport argue it's more fuel efficient, environmentally friendly and cost-effective than road or rail. Yet over half of India's goods are shipped by road, and volumes are rising. Inland water transport accounts for less than 1 percent, according to the authority.

India's objective is for 111 waterways spanning 20,276 kilometers (12,600 miles), according to the Ministry of Shipping. Three are operational, the July 21 government statement shows.

The nation needs to dredge channels, build terminals and add barges -- and then convince companies to use them. Power generator NTPC Ltd. has transported coal on the Ganges, and Maruti Suzuki India Ltd. this year shipped cars from the holy city of Varanasi in northern India to Kolkata on the east coast. Other businesses have yet to follow suit.

"We've had discussions with Inland Waterways Authority, though haven't yet planned a trial," said Jnaneswar Sen, senior vice president for sales and marketing at Honda Cars India Ltd. in New Delhi. "Current river waterways capacity is extremely low."

Verma plans to put projects for six rivers up for tender by December. His goal is a network of functioning waterways by 2030. The obstacles to the target, though, are formidable.

"We're pushing a new sector at a time when the global economy is down, the national economy is slightly low and banks are stuck with non-performing assets -- most of them in the infrastructure sector," Verma said.