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Cabotage relaxation will lower cost of export cargo: Gadkari

      05/31/2018

Minister of Road Transport, Shipping and Highways Nitin Gadkari has been one of the most consistent ‘delivering’ ministers of the BJP government by constructing a record 27 km of highways a day. In an interview, he shares the top achievements of his Ministry and the unfinished agenda. Excerpts:

What do you count as your top achievements in the last four years, and what is the unfinished agenda?

We have done a lot of work. However, there are three most important projecs. One is the Chardham project —– of 12,000 crore stretching across 950 km that goes up to the China border in the Himalayas. That project — comprising tunnels and viaducts — will connect Badrinath, Kedarnath, and Gangotri and will provide all-weather connectivity that will prevent accidents that have caused thousands of deaths in the past. On that project, 60-70 per cent work is done. I would have liked to complete that strategic project before December. However, the project is stuck with the National Green Tribunal. Second, around 70 per cent work is complete on the Mansarovar Road that starts from Pithoragarh, and provides connectivity to Nepal. Third is the Ganga rejuvenation project. Of the 210 sub-projects under this, 47 water purification projects are complete. Projects to clean the Ganga, the Yamuna and their tributaries in Uttarakhand have been completed. In Delhi, almost half of the projects and several others including the one in Mathura with Indian Oil and in Patna have started. Industrial units like sugar factories and paper mills have been asked to cut their affluent discharge to zero so that the rivers remain clean.

If you form the government after the 2019 general elections, what will be the top priority in infrastructure?

Waterways will be our top priority. We have 7,500 km of coastline and 20,000 km of waterways. As waterways are better developed, we will see increasing use of water transport modes — catamaran, hovercraft, etc — to efficiently move people and goods. Waterways is the cheapest mode of transport, followed by railways and finally roads. Already, waterways are being used to export vehicles from the ports of Tuticorin, Vishakhapatnam and Chennai. This is effectively lowering the cost (landing price) of products. For instance, we are sending Ashok Leyland vehicles to Bangladesh using waterways. And this is making each vehicle cheaper by 10,000-15,000. The 1,680-km Varanasi multimodal project is set to be inaugurated in October. Maintenance dredging on this stretch of the Ganga will be completed by next March. Work is starting on several such projects... we will have logistics parks along the waterways just like the facilities we have along roads. The Ganga between Haldia and Varanasi will have four multimodal facilities. Once we have this in place palmolein can be brought from Haldia to Uttar Pradesh lowering the cost of oil in the process by 1.5 a litre. Mangoes of Uttar Pradesh can also be exported to Bangladesh and it will boost trade, in general.

How do you plan to fund all this?

Now that the major ports are in profit, we have given (some) waterways to ports. The ports can raise cheaper dollar loans on the strength of their balance-sheets. These funds can be used for waterways. Maharashtra’s waterways have been given to JN Port Trust, and that of Odisha, Jharkand, West Bengal to Paradip Port.

Cabotage rules have been relaxed. Don’t you think Indian shipowners are losing out in the process?

Not really. They used to get permission and not be able to move. This is like international airlines not being allowed to pick up passengers from India and have to go back empty, which is untenable. They can fly passengers from India at lower costs. Similarly, this cabotage relaxation will help lower the cost of export cargo. We are helping Gujarat’s cotton produce — if it goes to Tamil Nadu in foreign flagged ships — exports will increase. We have given benefits to fruit, vegetable, fertiliser, foodgrain trade through cabotage.

The use of the fuel cess has been widened. Does that impact the funds availability for NHAI and waterways? Will NHAI be listed on the bourses?

It will now be decided by the Finance Ministry, which is in charge of budgeting. We do not need funds immediately. Through the toll-operate-transfer (TOT) mechanism, we raised funds for road projects. For infrastructure, my vision was instead of monetising, we would have liked to raise funds from the public and given them eight per cent interest spread over 10 years. People could invest in these bonds for 10 years, and upon retirement receive funds from NHAI. Foreign investment works on Internal Rate of Return of 12 per cent, whereas at eight per cent, we could get funds at a lower cost for building infrastructure. This is lower than the cost at which we could have raised funds rom banks. But the Finance Ministry had reservation – on how we could offer higher interest than the prevailing rate.

On road safety, India still remains a laggard with the highest number of accidents globally...

This is probably our only failure, although the entire responsibility is not ours. There are areas in automobile engineering for improving safety. We have reduced accidents and deaths by five per cent in the last four years, though we had a target of lowering them by 50 per cent. This has been done by road engineering, constructing bypasses, service roads, crash barriers. We have invested 12,000 crore in this area.