Briefing Note Integration of Cold Chain into Inland Waterway Transportation in West Bengal Pilot Models energy efficiency, and adopting better India, being a party to the Montreal Protocol technology options with a 20-year time since 1992 has been successfully implementing horizon. Today, the Indian cold chain sector the Country’s Programme since 1993. On 27th accounts for only a small share of the September 2021, India officially ratified the commercial cooling segment but the cooling Kigali Amendment of the Montreal Protocol. demand is likely to grow given the The Indian government intends to draw up a Government's focus on improving farmers’ national strategy for the phasing-down of HFCs income through Doubling Farmers’ Income by the year 2023 and to amend the existing initiative (DFI). To achieve DFI’s objectives, domestic laws that govern the implementation particularly to better food quality and reduced of the Montreal Protocol by the middle of 2024 wastage, creation of a seamless cold chain to facilitate the HFC phase-down. network through robust cold chain infrastructure is imperative. In line with its vision of improving cross- The phase-down of HFCs under the Kigali sectoral energy efficiency and reduction in Amendment is expected to prevent the GHG emissions, the Indian Government has emissions of up to 105 million tonnes of carbon also been focusing on developing its IW dioxide equivalent of greenhouse gases, helping transportation capabilities to promote an to avoid up to 0.5 degrees Celsius of global temperature rise by 2100 alternate mode of transport, which not only provides economic benefits but also consumes less energy and releases lower GHG emissions Under the existing provisions of the Kigali per tonne-km of transportation, compared to Amendment, India has agreed to freeze its roads. In 2016, the Indian Government notified production and consumption of HFCs by 2028. 111 inland waterways as National Waterways of India under the National Waterways Act, India has until 2047 to phase out HFCs from 2016 and has undertaken several projects its refrigeration industry. along these National Waterways to create adequate draft and shore-side infrastructure On 8 March 2019, India became one of the first to support the development of IWT. countries in the world to launch a The Capacity Augmentation of National Waterway 1 comprehensive Cooling Action Plan (CAP), with (Jal Marg Vikas Project) is expected to help save more a long-term vision towards promoting than 150,000 tons of CO2 equivalent in greenhouse sustainable cooling solutions across sectors. gas emissions annually by moving cargo away from CAP focuses on inter alia reduction of cooling high fossil fuel-consuming road and rail networks. demand, refrigerant transition, enhancing The state of West Bengal has a strong economic profile, a high produce of fruits, vegetables & fish, and the presence of well-connected highways and railways networks, along with a unique opportunity to realize the potential of IWT. The state has high demand potential for logistics infrastructure and services with its large consumer base and strategic location to serve as a gateway for east and north- east India as well as the neighboring countries of Bangladesh, Nepal, and Bhutan. The Government of West Bengal (GoWB) has identified the logistics sector as a key growth sector. West Bengal logistics sector estimated at USD 20 billion West Bengal has the second largest cold storage (CS) capacity in India (21% of the total capacity), with around 575 cold storage facilities accounting for a capacity of 7.5 Million tonnes. It is estimated that around 30,000 trucks The key objectives of the pilot models was to: commute within Kolkata every day. However, (i) review existing cold chain corridors logistics inefficiencies persist due to a combination of a higher use of road transport crossing MKA, and determine which parts and spatial constraints on the three main of one or several corridors could be shifted bridges on the Hooghly River connecting towards inland waterways to improve the eastern and western parts of Kolkata (that are efficiency and reliability of TCL; all operating above capacity) causing a day- (ii) to identify solutions to improve long gridlock. This results in an average waiting preservation of sensitive produce in IW time of about 12 hours for trucks to cross transportation; Kolkata, higher logistics costs, and adversely impacts the efficiency of SM Port by 25%. (iii) and to provide recommendations to Kolkata is also one of the largest emitters of improve interconnectivity of different greenhouse gases (GHG) among Indian cities. elements of the cold chain corridor. To actualize the economic and logistics Based on the criteria for the pilot selection, potential of KMA, it is imperative to alleviate three corridors were shortlisted for further the challenges of city congestion by effective exploration. utilization of multi-modal connectivity options for the transportation of passenger and freight 1. Integrating Ro-Ro transport in the existing traffic. corridor for potato movement from Burdwan to North 24 Parganas wholesale markets To support the GoWB in actualizing the economic and logistics potential of KMA, the 2. IWT movement for export of marine fish World Bank appointed KPMG IIR consortium to from Digha to Haldia port undertake a study to develop pilot models for 3. IWT movement for transporting milk (in the integration of cold chain in IW Tetra Pak) from Kolkata to Guwahati. transportation, and that could be implemented under the ongoing West Bengal Inland Water Transport, Logistics, and Spatial Development Project (WBIWTLSDP). Pilot-1: Potato movement from Burdwan – North 24 Parganas Details of the proposed pilot for transportation of potatoes - From the cold storage, the trucks will reach Sheoraphulli ferry ghat via AH-1 and SH-2, where the trucks will be loaded onto the Ro-Ro vessel to reach the other side and then move on to the North 24 Parganas. Comparison of potato transportation costs Gaps: The current mode of transportation lane road with a width of 10 m (including increases traffic on the road and causes the drains) should suffice for seamless congestion and air pollution. movement. Recommendations to bridge the gap Estimated costs: The overall infrastructure investment (vessel and terminals) excluding (i) The Ro-Ro terminals are required on both the approach road is estimated to be about sides of the river. Currently, the facilities at INR 8 to 10 Crores. The viability of the Sheoraphulli ghat and Du-paisar ghat are terminals will depend on the non- Agri traffic pontoon-based and are not suitable for the on the AH-1 destined to the North 24 Ro-Ro movement. The cost of developing Parganas district and other nearby regions. new Ro-Ro terminals would be about INR 2 Crore each. Benefits: Alternate route on the Origin Destination (OD) with the potential to reduce (ii) Currently, all the Ro-Ro vessels are fully congestion on the existing route in the future utilized in service. To operationalize this and associated economic benefits route, there is a need for acquiring a new vessel. The vessel that uses diesel Impact assessment: The impact of this pilot propulsion is in the range of INR 4 to 7 Crores depending on the vessel movement is low considering that the specifications. Modern propulsion expected reduction in the distance (~13 km), technologies could cost higher but could reduction in congestion and GHG emissions are be operationally cost-effective and more not significant. A large part of the movement environmentally friendly. remains on road even with the pilot route. (iii) Currently, the approach road for arriving at However, in the future, the impact of this pilot ghats is not suitable for trucks and needs model can be considerable if the traffic to be augmented for both river ghats. A 2- increases many folds on the Nivedita Setu which would result in timing restrictions and Way forward: Limiting investment in roro for congestion hampering the transit times. potato cold chain alone would only have marginal gains given the general nature of Ease of implementation: The pilot model RoRo services which serves all commodities. requires capital for investment in Ro-Ro On its own, specific investments to terminals at Sheoraphulli Ghat and Du-paisar accommodate cold chain commodities could Ghat and a Ro-Ro vessel both of which are be marginal. Consequently, future plans to easily available. Since the investment cost is shift potato cold chain to RoRo should not prohibitive, the ease of implementation is determine the feasibility of coupling other high. temperature sensitive goods of similar temperature requirements. Pilot-2: Marine fish movement from Digha – Kolkata port (via road) and to Haldia (via IW) Details of the proposed pilot for transportation of marine catch - The pilot proposes a processing centre at Digha from which processed fish can be directly exported to Haldia port in reefer containers using an IWT container barge. Comparison of marine fish transportation costs should not exceed 48 hours and in fair Gaps: The current mode of transportation weather. (non-temperature controlled vehicles) results (iii) There is a need to develop small-size not only in cargo quality loss but also increases container vessels with a capacity of about traffic on the road and causes air pollution. 50 TEUs to carry export and domestic shipments of containers along NW-1. Recommendations to Bridge the gap (iv) Provision for berthing of IW vessels at (i) Development of an integrated export Haldia port and handling infrastructure (a processing center with a cold chain reach stacker) for transfer of containers terminal close to the shore with a berthing from IWT vessel to berth at the port. facility for IWT vessels in the Digha region. (v) The integrated processing center with the The facility should be developed near the IW terminal proposed at Digha should be fishing harbor to enable seamless listed as the Bill of Lading acceptance point transport of fish. If the LNG re-gasification plant at Digna is built the fish processing with the shipping lines to enable the should be integrated close to the LNG seamless entry of the containers at the regasification plant. Kolkata/Haldia port. This would also help (ii) The current IWAI container vessel will in ensuring a requisite supply of empty need to be modified for carrying reefer containers at Digha with desirable free containers. The cost of modifications will time. The state government may extend depend on the current general necessary support to the exporters in the arrangement (GA) drawings of the vessel. region and facilitate the process. Such a vessel will have to be classified as a (vi) The use of new tech reefers that would River-Sea-Vessel (RSV). The requirements minimize GHG emissions. of this voyage will need them to be RSV- Estimated costs: Development of integrated Type III, where journey time in the sea export fish processing centre with IW terminal with an investment of about INR 24 Cr. Vessel modifications to RSV type III (cost expected to traders’ association are needed for seamless be about INR 1 Cr primarily towards keel exports. strengthening and additional steel for Way forward: strengthening). (i) The integrated fish processing and IWT Benefits: Reduced wastage of catch due to terminal may further be developed to decrease in handling; smooth transition from enhance the tourism in Digha region and bringing marine catch onshore to processing improve the economic and living and exporting reducing time to export; and conditions of the local people. economic benefits due to the reduction in air (ii) Developing the real estate to facilitate fish pollution and modal shift to IW transportation. processing, storage, high-end eateries, and Impact assessment: The impact of this pilot is restaurants will also attract investments in expected to be high considering that the mode the region and generate employment of transportation is likely to shift entirely on IW opportunities. transportation and also that proposed changes (iii) To reduce the energy consumption at the introduce a new logistics route that removes integrated processing centre, solar panels unnecessary transport movements in the can be installed on roof tops and other export supply chain by locating all value-added built-up spaces. facilities from processing to customs at one (iv) It is recommended that for the terminal to location. be technically feasible, finger jetties for berthing fishing vessels could be Ease of implementation: The ease of developed. implementation factor is low. It needs (v) The land for the facility and IW terminal concurrence and investment in time and effort could be provided by the state government at multiple levels as detailed in the or respective government authority. interventions section even for carrying out the (vi) The cold storage facilities, processing pilot movement. At the infrastructure level, it center, and associated infrastructure may would be procuring land, developing an be developed through Public Private integrated processing center with an IW Partnership (PPP). terminal, and procuring container barges (vii) Once a processing facility is established, capable of transporting reefer containers. At the comparison should be made between the regulatory level, conducive export Digha-Haldia by road and Digha-Haldia by clearance policies and alignment with the fish IW transportation. Pilot-3: Tetra Pak Milk from KMA to Northeastern Region (NER) Details of the proposed pilot for transportation of marine catch - The milk Tetra Pak from the processing plant in Barasat will be transported to the Garden Reach Jetty (GR Jetty). From the jetty, the vessel will traverse through NW-1, the IBP Route, and NW-2 to reach Pandu River port in Guwahati. At Pandu port, cargo will be unloaded and transported to the warehouse in Lokhra, about 13 km from the port. Comparison of Tetra Pak Milk transportation costs Gaps: There are no major gaps in the current mode of transportation. Recommendations for pilot: 1. A cargo consolidator / 3PL operator in the IWT segment who can 1) consolidate cargo of larger milk processing companies such as Amul 2) generate additional containerized cargo to generate economies of scale for transportation to the NER and 3) generate return containerized cargo to KMA. 2. Container vessels are almost non-existent on NW-1 and NW-2. Developing container vessels of 1,000 – 1,500 MT (80 to 100 TEUs) capacity. 3. Reach stackers for loading and unloading of containers at Guwahati port for seamless operations. 4. Warehousing facilities at Guwahati port and value-added services such as track and trace along the entire multi-modal route needed to differentiate from road transport Estimated costs: Deployment of a container vessel on the Kolkata Guwahati Route for transportation of milk and other containerized cargo from Kolkata to Guwahati Benefits: Operational IWT route from Kolkata to Guwahati and improved supply chain resilience. Impact assessment: The impact of this movement is low primarily because the IWT route is not time and cost-competitive as compared to road transport. Larger container vessels with return cargo can improve the impact of this pilot movement. Travel time remains a concern. Ease of implementation: The pilot movement is easy to implement as the route has already been tested previously, the vessel can be easily made available, and the cargo owner (Keventers) is willing to transport consignment using IW transportation. However, to operationalize this route, additional cargo and effort of the aggregator are needed. Way forward: The feasibility of a general container service to Guwahathi with some reefer places should be looked at, which comprises the milk but also other containerized cargoes. Also a multi- purpose vessel could be looked at. Key recommendations: Short term recommendations: Infrastructure development in terms of building Ro-Ro and IW terminals, procuring energy efficient vessels, developing cold storage infrastructure in terms of modern packhouses and integrated cold storage, allied infrastructure such as robust road connectivity, and setting up cargo visibility and tracking system could be the immediate focus of involved stakeholders towards strengthening the integration of cold chain with IW transportation. This would require constant support from the Government in terms of viability gap funding for the private investors since the initial volumes of cargo on the IW network are expected to be low. Medium term recommendations: To increase the volumes of cargo on the IW network, it would be crucial to bring about awareness among the exporters and transporters about the benefits of IW. It would be the onus of the State Government to understand the feedback and grievances of transporters to develop and streamline policies around export, financing/subsidies, and incentivization of private investors for infrastructure creation. Furthermore, skill development programs and research initiatives could be undertaken by the Government along with the support from the World Bank to develop training facilities around new technologies and transport chains. In addition it would be beneficial to obtain direct feedback from existing demonstrations of new technology and to assess the viability in relation to IW use. There are many ongoing developments related to propulsion technologies and refrigerants. Therefore, feedback and information from these trials should be taken into consideration before making final decisions. Long term recommendations: The proposed technology interventions are relatively new and emerging and are expected to take time to be completely adopted in the global markets. Therefore, the Government, in collaboration with the World Bank Group could accelerate the penetration of new preservation and propulsion technologies in the cold chain and IWT in the long term. The Government could also educate and incentivize transport operators to use cleaner technologies in the future, thus contributing to the FY 2030 climate targets of the country. Reference Document Pilot Models for Inland Waterway Transport Integration (KPMG & IIR, 2022) DISCLAIMER This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. 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