The Cabinet Committee on Infrastructure recently approved the investment proposal for converting the Chandikhole-Paradeep section of NH 5A in Odisha to six lanes as part of the Government's port connectivity upgrade plan. The project, to be implemented under National Highways Development Project phase-5 on design-build-finance-operatetransfer basis in BOT (toll) mode of delivery, is estimated to cost Rs 1,014 crore to cover a distance of about 77 km. The concession period will be 30 years including the construction period of 30 months. If past experience is any indication, the cost and time overruns are almost inescapable in any such project. For example, the construction of four-lane Chandikhole-Paradip NH 5A was originally estimated to cost Rs 450 crore but it exceeded Rs 600 crore and the commissioning, due in 2007, took place in 2009. A special purpose vehicle was constituted by the National Highways Auhtority of India for this construction in 2003 with participation of Paradip Port Trust (to share 10 per cent of the cost). It is not known if a similar body will be constituted for the proposed conversion into six lanes. The four-lane project was done to ease road congestion caused by a large number of trucks carrying iron ore from the mines to Paradip port for exports. The congestion has virtually vanished now with the sharp drop in iron ore exports.
River transport needs support
In July last year, the Union Government issued a gazette notification empowering the Inland Waterways Authority of India to slap levy on inland waterway transport (IWT) operators using the national waterways. The levy was 2 paise a tonne a km; in addition, there were berthing hire and pilotage charge. None of the IWT operators concerned, it is learnt, has paid a single paisa as levy so far, making the authority to mull rollback of the impost. IWT operators have appealed to the authority for a rollback but it has not so far heeded to it; nor has it succeeded in collecting any money by way of the levy proposed. The operators point out that the investment subsidy scheme for acquisition of new craft and the distance subsidy scheme for river transport of goods over long distances along the national waterways have been withdrawn. Instead of restoring them, the authority chose to impose a new burden which, it is estimated, will render river transport costlier vis-à-vis rail and road transport. As it is, river transport in our country suffers from a handicap. There being no night navigation facility on the national waterways, vessels can be operated only during the day time. Which means time taken in river transport is long, adding to the cost. Operators wonder if the authority is really interested in the promotion of river transport in the country.
Maersk's reason fails to convince
Suspicions have been aroused by the decision of Maersk Line, the world's biggest container line, to stop bookings for the north Europe-to-Asia trade, according to a report in Shipping Gazette . Quoting the company's Weekly Highlist newsletter, the report says that Maersk has told shippers that it does not and will not have the eastbound slots needed until early May. There are a large number of vessel cancellations following the Chinese New Year, leaving north European ports short of slots to transport goods to the east. Customers have been advised to make alternative arrangements. Explaining, Maerks says that the low demand for westbound cargo on the Asia-Europe leg following the Chinese New Year led to several cancellations of the westbound sailings and, in turn, eastbound sailings. However, not everyone in the world of shipping is prepared to buy this theory. A report in American Shipper suggests that the Danish shipping giant is using it to push up the freight rates. Only 5-10 per cent capacity has been withdrawn and it should not be a problem.