Briefing Note Integration of Cold Chain into Inland Waterway Transportation in West Bengal Baseline Assessment West Bengal is the fourth largest state economy in modes, the existing inefficiencies in passenger and India and the largest state economy in eastern freight traffic are expected to adversely impact the India. The Gross Domestic Product (GDP) of the city’s economic competitiveness. state was USD 204.64 billion in FY 2020-21. Kolkata In addition, the state is the second largest state in – the capital city and economic center of West terms of installed capacity for cold storage in India, Bengal, is among the largest and economically however, nearly 97 per cent of the 2.3 million productive metropolitan cities of India alongside tonnes capacity is for single commodity use i.e. Mumbai, Delhi, and Chennai. It is also one of the potato. West Bengal is estimated to account for less most densely populated and congested cities in the than five percent of India’s total reefer vehicles, world. Kolkata Metropolitan Area (KMA) is home to which is grossly inadequate for optimum TCL. The 14.8 million people, which is expected to grow to transportation of fruits and vegetables to/from 17.6 million by 2030, causing fragmented and Kolkata wholesale markets primarily takes place uncoordinated growth patterns, spatial constraints, through non-refrigerated trucks, which results in and growing pressure on existing infrastructure. substantial post-harvest losses, deterioration of The state has six agro-climatic zones which favor food quality, and reduced shelf life. The energy the growth of diverse fruits, vegetables, and spices. costs contribute to a major portion of the operating Due to its strategic location, West Bengal serves as costs of cold storage facilities and cold chain a commercial and transport connectivity hub for transporters. Hence, along with augmenting the neighboring states and countries. It connects North capacity and network of cold storage, it is East Region (NER) of India to rest of the country via imperative to promote and incentivize the adoption the Siliguri Corridor. It shares land borders with of energy-efficient, cleaner, and/or renewable Bangladesh, Nepal and Bhutan with multiple Land energy-based refrigeration technologies in TCL. Customs Stations (LCSs) for cross-border trade. In Besides having a strong economic profile, the particular, Syama Prasad Mookerjee Port, Kolkata presence of well-connected highways and railways (SMPK or “Kolkata port”) (comprising Kolkata Dock networks, West Bengal also presents a unique System and Haldia Dock Complex) acts as the opportunity to realize the potential of Inland gateway port for the entire NER, West Bengal, Bihar Waterways Transport (IW ) due to the presence of and Jharkhand and also serves a portion of Export – a vast river network. The river Hooghly passing Import (EXIM) cargo for eastern Uttar Pradesh and through West Bengal is part of India’s first northern Odisha. SMPK is the sole natural gateway designated inland waterway viz. National for two countries viz. Nepal and Bhutan. With such Waterway-1 (NW-1) connecting Prayagraj (Uttar a high freight movement demand and road Pradesh) to Haldia (West Bengal) near Kolkata. The infrastructure constraints, it takes an average primary hinterland for NW-1 also has access to the waiting time of 12 hours for trucks to cross Kolkata. Indo-Bangladesh Protocol route (IBP) connecting Despite its strong economy and multimodal Bangladesh and eventually the National Waterway connectivity with key trunk routes across highways, – 2 (NW-2) on the Brahmaputra river which flows railways and inland waterways transport (IW ) across NER. To support the GoWB in actualizing the economic and logistics potential of KMA, the World Bank appointed KPMG IIR consortium to undertake a study to undertake a baseline assessment to support the ongoing West Bengal Inland Water Transport, Logistics, and Spatial Development Project (WBIWTLSDP). The objective of the study was to establish the cooling demand forecast and potential role of IW transportation in the agricultural cold chains and identify challenges and opportunities for the efficient integration of IWT in the agricultural cold chains in/around the Kolkata Metropolitan Area (KMA). Production & Consumption in West Bengal The production of horticulture commodities accounted for 15.9% of the total share of India’s production in 2018. Processed vegetables form 10% of the processed commodities in India. The overall consumption of vegetables was around 6.6 million tonnes during FY 2018-19. The total vegetable exports amounted to 0.75 million tonnes. Fruit production accounted for 3.9% of the total fruit production in the country. The estimated annual consumption of fruit for FY 2018-19 was close to 0.36 million tonnes. Close to 6,900 MT of processed fruits, juices and nuts and 20.4 MT of mango pulp were exported from KMA primary hinterland in FY 2021- 21. The state also accounts for 13% of the total fish production in India. It is one of the largest consumers of fish products. The surplus and high-quality fish and other marine products are also exported via Kolkata. Milk production accounts for close to 3% of the total milk production in India. Kolkata has a consumption capacity of 2 million tonnes of milk per day. Due to strong production within West Bengal, dairy exports from the state stood at 8,791 tonnes in FY 2020-21. Demand, Energy Consumption & GHG’s The total annual TCL demand for fruits and vegetables is 1.8 million tonnes, out of which 93 % of the demand is from cold storage. The total energy consumption resulting from the F&V value chains is 0.25 million MWh and GHG emissions is 39,980 tonnes CO2 yearly. The total TCL demand of fish is estimated to be 1.13 million tonnes, of which 70 % is expected to come from post-harvest handling. This contributes to the energy consumption of 0.3 million MWh, and results in 192,777 tonnes of CO2 annually. The total TCL demand for milk is estimated to be 3.3 million tonnes, spread evenly across the cold chain, resulting in the energy consumption of 1.2 million MWh and GHG emissions of 0.35 million tonnes of CO2. Integration with IW /Ro-Ro Sunderbans was identified as a high potential corridor to be integrated with KMA through IW transportation due to high production of F&V and fisheries and lack of existing road/rail connectivity in the area. Currently, the Sunderbans is not connected with IW transportation , however the area is proposed to be connected with Namkhana through NW-97. The commodities located on the either side of the waterways (primarily NW-1) are expected to have higher potential for IW /Ro-Ro integration. The Ro-Ro movement in such cases would help in resolving the challenges of congestion on the bridges in KMA. The commodities located on the same side (eastern/western) of NW-1 with relatively at shorter distances (<50-60 kms) have lower potential value in the integration with IW transportation due to high transit time as compared to road and limited value in terms of resolving existing challenges in road transport. The movement of shortlisted commodities originating from the states like Uttar Pradesh, Bihar and Jharkhand to KMA was found to be low. TCL supply-side assessment in West Bengal Pack houses/Ripening chamber. There are 2-3 pack houses in the KMA region, which mostly cater to export cargo. Ripening chamber capacity is around 300 tonnes per day in the region. However, all the ripening chambers in the state currently cater to banana ripening. Cold Storage/ Integrated Processing units. West Bengal has around 575 cold storages. However, most cold storage capacity is dedicated to a single commodity: potato. There are 53 cold storages catering to the production of fish and fish products, of which, 49 units for fish processing are integrated cold storages cum processing units. Currently, there are 153 chilling center facilities with a total capacity of 314 tonnes/day. Reefer Trucks/Vans. West Bengal is estimated to have a small fleet of 200-500 reefer vehicles, which accounts for less than 5% of India’s total reefer fleet. Apart from reefer trucks, there are more than 20,000 insulated vehicles used for the transportation of milk which carries chilled milk at 3 – 4 °C. From 2014-19, 2,165 units of fish transportation units viz., refrigerated & insulated trucks, auto-rickshaws, motorcycles, and bicycles with ice boxes have been sanctioned by the Central Government. Additionally, five 6 ton insulated trucks and two 10 ton refrigerated/insulated trucks have been sanctioned under the Blue Revolution Scheme. Refrigerated containers. Refrigerated intermodal containers are used principally for the export market and are owned by major shipping. Post pandemic there is an acute shortage of reefer containers. Prevailing TCL technologies and refrigerants TCL Demand, Supply, Refrigerants and Prevailing Technologies Total TCL demand in the primary and secondary hinterland of KMA is estimated to be 6.28 million tonnes accounting for the energy consumption of 1.93 million MWh and resulting in GHG emissions of 0.62 tonnes of CO2 on a yearly basis. Table 1 summarizes the current supply of cold storage, the technologies and refrigerants in the KMA. Ammonia is the largely preferred refrigerant in West Bengal, however, due to safety concerns, ammonia-based systems are used in cold storage located outside the city limits. R22 is the most commonly used refrigerant in KMA though it is scheduled to be banned by 2030 due to emissions concerns Ammonia is used in single commodity cold storages for potatoes by unorganized players and R22 is used by organized players and multipurpose cold storages. Table 1: Cold storage supply S. No Cold Storage Type Capacity (tonnes) Technology 5 Refrigerant 5 1. Potato Cold Storage 71,15,0001 Bunker Coil Based Ammonia 2. Multipurpose Cold Storage 3,30,0001 Direct Expansion R-22 3. Fish Cold storage 19,0212 Direct Expansion R-22 & Ammonia 4. Fish (Processing Unit) 1,9892 Blast Freezing R-22 & Ammonia 5. Meat 403 Direct Expansion R-22 6. Dairy (Chilling units) tonnes 2534 Direct Expansion* R-22* per day Key Findings & Recommendations Top commodities shortlisted for TCL demand estimation in KMA hinterland are Potato, Tomato, Carrot, Orange, Apple, Grapes, Banana, Fish, and Milk.1 Post-harvest losses Fish, grapes, mango, potato, and other seasonal vegetables suffer from high loss percentage. However, due to high value of commodities, the per unit economic losses are higher for fish, meat, apples, grapes, and mango. Even though the losses are low in Milk, it requires temperature-controlled environment to maintain the quality as it is highly perishable. ▪ The introduction and/or improvement of TCL can significantly reduce post-harvest losses. ▪ The potential post-harvest loss reduction ranges between 1.5 percent to 6.7 percent, depending on the commodity. Challenges in commodity value chains Fruits & Vegetables — Most fruit and vegetables (except potatoes) are not using TCL currently and have the potential for improvement through the introduction of TCL. — Where refrigeration is applied cold stores are often quite old and inefficient. They do not always achieve the required storage conditions. Insulation is sub-optimal and often needs repair. — Food is often not stored in an optimal manner that allows air flow through the stored product (poor loading can lead to disease/deterioration of the product and food loss). — Maintenance and monitoring of cold stores are not often applied, and control systems are often poor . Few cold stores have renewable energy applied (e.g., PV panels). — Due to a lack of adequate connectivity, the Sunderbans islands face challenges in transporting produce to the KMA region despite fertile land for vegetable cultivation. Possibility of integration of IW with wholesale markets near the Bangladesh border located in Bongaon, Basirhat, Shantipur, Krishnanagar, Haripur, and North 24 Parganas (hinterland) is low as these are located closer to the Bangladesh border where IW transport connectivity is not available. During the harvesting season, often due to high demand, the availability of the trucks becomes a challenge leading to high transportation cost during the peak season. ✓ An integrated cold chain should be developed for F&V that encompasses farm-level chilling, bulk/market cold storage, and TCL transport at effective prices to create demand. Collective chilling centres with the right mix of commodities (to address seasonal demand) from multiple farms might help in reducing the losses while not hugely impacting the cost. ✓ Control systems could be improved. ✓ The energy consumption of most cold storage systems can be optimized leading to reductions in energy consumption of 20-30%. ✓ Energy consumption could be reduced by the application of renewables. Fisheries — High container costs are a major challenge faced in cost-effective exports of fish (Shipping charges for exports to the US from KMA hinterland has gone up from 4,000-4,500 USD to 16,000 USD per 40’ container over the last 1.5 years)2 — The low draft at Kolkata Port is another challenge due to the vessel connectivity being hampered. — Fish transported for local consumption is transported in boxes containing crushed or block ice. 1 Refer to KPMG India Service LLP & International Institute of Refrigeration (2022) Baseline Assessment Report for detailed assessment. 2 Stakeholder Interactions — Currently, no evidence has been found that ice is produced by dedicated ice machines. — Ice is only applied after fish are packed for transport. ✓ Ideally flake ice should be applied to fish transported for local consumption. ✓ Dedicated ice machines would provide a more optimal and energy efficient solution. ✓ Fish should be chilled as soon after catching as possible. Milk — Milk requires uninterrupted chilling from the farm to the dairies to maintain its integrity and quality. Although the improvement in shelf life is not drastic, the heavy demand for fresh milk entails a strong cold chain network in KMA. ✓ Milk could be directly chilled from the farm using cold churns. The shortlisted commodities move in different type of value chains and the adoption of cold chain in the value chains is primarily in accordance to the transportation and storage needs defined by the market demand. The cold chain adoption in most commodities is either in the Nascent or Emerging stage, stating the low maturity of cold chain adoption specifically in the domestic consumption market. Fruits and Vegetables are primarily moving without cold chain except for some amount of cold storage. Fisheries and for domestic consumption are moving without cold chains due to customer preference. Movement of milk is taking place in TCL to avoid spoilage. Reference Document Baseline Assessment Report (KPMG & IIR, 2022a) Review of Cold Chain Technologies, Challenges and Potential (KPMG & IIR, 2022b) 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. The World Bank does not guarantee the accuracy of the data included in this work. All questions and queries relating to this brief may be addressed to [Name] [Email] The World Bank, 1818 H Street NW, Washington DC 20433, USA;