Jalvahak Scheme

a. Overview of the Scheme

An efficient transport system, where there is optimal utilization of various modes of transport, is pivotal for enhancing logistics efficiencies and costs. This also leads to reduction in the transport sector related emissions in the country. India, currently, faces an unbalanced logistics landscape with a significant reliance on road and rail networks for transporting freight cargo.

Road transport dominates the sector, accounting for approximately 65% modal share followed by rail at 26% modal share. In contrast, Inland Water Transport (IWT) has only a 2% share in India's overall freight movement.

b. Cargo Promotion Scheme for IWT

The IWT sector, unlike ports, is in nascent stage and requires support to promote modal shift of cargo, in addition to creation of physical infrastructure. While the cost of transporting cargo on the waterways itself is less compared to other modes of transport, the multi modal nature of the transport makes the total logistics cost higher than other modes of transport. Even in the developed part of world e.g. Europe, programs like Marcopolo were launched to provide financial support for modal shift of cargo to waterways. Accordingly, while we work on providing hard infrastructure on our waterways, it is essential to provide financial support to nudge cargo owners for modal shift to waterways which has to compete with much better funded and developed road and railways sector (the budget of IWT sector is less than 1% of road/railways). Accordingly, a scheme for providing 35% incentive to promote the utilization of inland waterways transport sector by cargo owners and for establishing scheduled service for cargo movement on NW-1 and NW-2 and NW-16 via Indo Bangladesh Protocol route has been approved by the Government. This scheme is expected to divert 800 million tonne Km cargo on IWT mode, which is nearly 17% of the current cargo of 4700 million tonne Km on NWs. The scheme is currently proposed at a cost of less than 100 Crore for three years and can be scaled up or modified depending on the success of the scheme.

The scheme naming “Incentives to Promote the Utilization of Inland Waterways Transport (IWT) Sector by Cargo owners and for starting Scheduled Services for Cargo Movement on NW-1, NW-2 via IBP Route and NW-16” have two different components to address the two specific needs of the IWT sector.

Scheme Component 1 : Providing incentives directly to the cargo owners (except for the cargo operated under Inland & Coastal Shipping Limited (a wholly owned subsidiary of SCI) for sustainable modal-shift of cargo from Rail/ Road to IWT mode to the extent of 35% of total actual operating expenditure incurred on waterways journey.

Scheme Component 2 : Scheduled Services by Inland & Coastal Shipping Limited (ICSL) with funding by IWAI to ICSL to demonstrate the reliability of IWT mode for promotion of IWT for the IWT vessel operated by ICSL.

Currently, the Scheme will be restricted only to NW-1, NW-2 and NW-16 via Indo Bangladesh protocol routes, as there is a lot of potential for growth of traffic. However, based on the success of the Scheme, it may also be extended to other waterways.

c. Objective

The objective of the Scheme is to :

    i. Provide impetus to modal shift of cargo to IWT mode by incentivising such shift; and
    ii. Demonstrate the reliability as well as readiness of the IWT sector for the purpose of boosting confidence of the stakeholders.

SCHEME COMPONENT-1

a. Financial incentives will be provided to the extent of 35% of the total actual operating expenditure incurred on waterways journey for the sustainable modal shift of cargo to IWT from road or rail modes. Also, such an incentive will be provided only for the long-haul movements on waterways i.e. distances greater than 200 km and shall exclude any expenditure incurred on first and last mile journey.

b. The Scheme will provide incentives directly to the cargo owners who shift their cargo from rail/ road to IWT mode using their own/ hired vessel or through their operators along NW-1, NW-2 and NW-16. A few indicative routes are as follows:

    i. Transportation of cargo by IWT between Haldia/Kolkata and Patna / Varanasi on NW-1
    ii. Transit cargo from / to Kolkata/ Haldia to Pandu / Karimganj / Badarpur on NW-2 & NW-16 using IBP route 
    iii. Transportation of cargo by IWT between Pandu and Dibrugarh on NW

c. The scheme will not be applicable

    i. For short haul movements less than 200 km
    ii. Ro-Ro, Ro-Pax and ODC movements
   iii. Movement between Haldia & Tribeni on NW-1. (Note: To account for movement in this stretch will only be possible when cargo moves 200 km beyond this stretch)
    iv. Transportation by ICSL.

SCHEME COMPONENT-2

Scheduled Services by ICSL

ICSL will operate the Scheduled Services through vessels already handed over to them by IWAI (Inland Waterways authority of India ) or vessels hired from the market, if any, between the following routes/ O-D pairs (onward & return journeys):

A. Within NW-1 :
    i) Haldia/ Kolkata – Patna-Varanasi

B. From NW-1 to NW-2/ NW-16 via IBP route :
    i) Haldia/ Kolkata – Dhubri-Pandu
    ii) Haldia/ Kolkata – Karimganj-Badarpur

Inland and Coastal Shipping Limited (ICSL) will be the implementation agency. 
A Joint Committee with representatives from Ministry of Ports, Shipping & Waterways (MoPSW), IWAI and ICSL will be formed for the purpose of evaluation & selection of proposals for providing incentives under the Scheme and overall monitoring of the Scheme.
The Joint Committee will also evaluate the performance of the Scheme on an annual basis and provide its recommendations for extension of period of Scheme or any other modifications for improvement in participation as well as overall impact of the Scheme.

The Scheme, initially, will be valid for a period of 3 (three) years.

At the end of each financial year, the performance assessment of the Scheme will be done by a Steering Committee. In addition to this an independent third party may be engaged for performance assessment of each financial year, if required.

Based on this performance assessment, the Steering Committee may consider undertaking the modifications, if any, to the Scheme and determine its continuity over the subsequent years.

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