Assessing the Economic Feasibility of Waterway Development in Bangladesh and India

8/10/2019 Assessing the Economic Feasibility of Waterway Development in Bangladesh and India

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Presentation overview


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National Waterway 5 (NW5) India


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NW5Stretches + proposed investmBasis of assessment: Inland Waterways Authority of India, 2010: Detailed Project Report for Deve

inland water transport along ECC and Brahmani/Kharsua river system

Stretch I: (river) TalcherMangagadi (USD 321 mln) to accommodate barges of 500 DWT 5 barrages including navigation locks (USD 256 mln), raising banks (USD 39 mln), dredging (U

other (USD 13 mln)

Stretch II: (river) ParadipDhamra (USD 33 mln) to accommodate barges of 500 DWT 2 navigation locks (USD 6 mln), Dredging (USD 18 mln), Terminals (USD 4 mln) , others (USD 5

Stretch III: East Coast Canal Variant A, 32m wide for 300 DWT (USD 314 mln): dredging (USD 204 mln), navigation locks (

bridges (USD 17 mln), others (USD 34 mln) Variant B, 45m wide for 500 DWT (USD 433 mln): dredging (USD 286 mln), navigation locks (U

bridges (USD 17 mln), others (USD 47 mln)

All can be considered as greenfield development

Project Packaging should be: River stretches (I+II) either or not with variant of developing canal


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Economic assessment NW5The DPR provides:

detailed description of all technical measures taken;

traffic projections and forecasts;

analysis of economic and financial feasibility;

DPR concludes that investment will be highly feasible: EIRRs between 32% (river imalone) and 13% (river + 32m canal)

Report however has methodological flaws.

90% of DPRs benefits appears to originate from leading to drastic overstating of economi

Acclaimed benefits due savings of fuel, of reduced CO2 and other pollution

If adjusted for these flaws, benefits appear to be less than costs of operations and mno return on investment


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Assessment other issues NW5Environmental issues are not considered

intrusive project of which significant external impacts can be expected. These impacts can be ponegative. EIA would be needed.

Socio-economic issues: + employment in coal mines and multiplier effect (I/O-matrix)

- land acquisition understated and need for resettlement ignored

Technical issue: capacity of waterway is insufficient for projected demand

Further issues narrow scope: IWT infra for coal (90% of projected cargo) and poor notion of other commoditi poor involvement of main stakeholders: coal mine and ports

no assessment of (developments in) competing modes / competing routes

sustainable transport for non-sustainable power generation

Overall conclusion: advise to ADB is not to engage in developing NW5


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Protocol routes in Bangladesh

Sections under consideration:

Rajshahi to Chandpur (West ro

Chilmari to Chandpur (North ro

SAARC IWT corridors 1)

Mongla-Ghasiakhali channel (S

part of SAARC IWT corridors 1 a

Mission was to assess these India-

Protocol routes. The related IWT r

however mainly serve domestic tr

International dimension is from IW

viewpoint not very interesting.


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Bangladesh network IWTBangladesh waterway network:

Class I waterways (navigable for


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IWT-sector of Bangladesh: characterEconomic features of the IWT-sector (for freight)

It is highly traditional, e.g. mainly using manual transshipment.

Because of long port dwell times and (possibly) also long idle times it has low productivitythat only 10% of a round trip time is for the actual moving of cargo.

It has much government interference with little room for private and local initiative.

Despite its inefficiency it has low tariffs.

The low productivity is a short-run hindrance in attracting new cargo and the low rate of is a long-run threat to competitiveness against road.

Low productivity is synonymous to underemployment and low returns of investment.

Recent introduction of container transport, which was problematic.

IWT can have a role in multimodal chains, for which it needs an open attitude towacooperation with road sector.

About 1 million barges are country boats, mainly operating in the informal sector.


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Possible ADB-engagement in IWT-Bangladesh (1)ADB can support studies for IWT-infrastructure reclassification

traffic studies, particularly for deciding on ambitions for lower-class waterways

hydrographic surveys for assessing investment and maintenance costs of maintaining wat

Projects of improvement on protocol routes. Their scope however is wider than navand would normally reside under Water Resource Management organizations and bconcerns:

Construction of barrage in Rashaji-Chandpur route for which pre-feasibility and feasibility

recently conducted. (pre-)feasibility studies for improvements of stretches in the ChilmariChandpur route a

Mongla-Ghasiakhali channel


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Possible ADB-engagement in IWT-Bangladesh (2)Support study for the establishment of multimodal (iwt-road) node in Baghabari. Its loca

promising but there are many issues to be resolved: - demand for transport and for logistics services;

- need for arrangements in India-Bangladesh protocol, if transit node;

- business model (initiators and form of cooperation) and business case.

Projects to enhance IWT-sectors productivity for long-run sustainability and for higher investment.

Through knowledge sharing, dialogue or technical assistance.

Projects to enhance use of innovation in IWT. Appropriate technology: development and diffusion of more energy efficient country boat e

New concepts: sailing clinics or other medical services providers for remote areas;

Promote Recognition of IWT in rural development plans.

Promote use of non-economic criteria. IWTparticularly by small vessels - often servespoverty, implying relatively low economic returns.

Assessing the Economic Feasibility of Waterway Development in Bangladesh and India

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