The government today said the Inland Waterways Authority of India (IWAI) will involve banks for ensuring availability of financing options for the private players engaged in inland water transport sector.
"Financing and funding for operation and maintenance of IWT assets is a challenge for shippers, vessel operators and asset management firms as the banking sector is not yet ready with any customised financing option for the sector," the shipping ministry said in a statement.
Addressing the day-long stakeholders conference on emerging business opportunities in Inland Water Transport sector, the IWAI chairperson Nutan Guha Biswas said the banking finance is needed for the emerging business opportunities that private players are inclined to be involved with.
Biswas said that lots of investments are being done to develop the waterway sector which is going to 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," the statement said.
Rajat Sachar, advisor, shipping ministry, sought recommendations from private players for policy changes to make inland water transport a vibrant sector.
Referring to the Jal Marg Vikas Project being implemented between Varanasi and Haldia on river Ganga, he said the government has decided to invest Rs 5,369 crore on one national waterway.
He also appealed to the financial institutions to offer products for private sector investment in IWT sector where annual government funding has increased by 12 times in the last 4 years.
The MD and CEO of the Bank of Baroda, P S Jayakumar, said that banks can provide flexible scheme for financing like providing the moratorium period for loans on existing as well as the new projects.
He added that issue of bonds can be the alternative source for long-term loan capital financing ship-owners.
The government is developing national waterways as a key transport intervention, as part of an integrated transport network strategy, which will help correct the transport modal mix that imposes huge logistics costs on the Indian economy.
At present the cost of logistics in India, at 15 per cent of GDP, is about twice those in the United States.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)