The Potential of Inland Waterways

ADB Transport Forum 8 November 2012 Xiaohong Yang, Asian Development Bank

World River Basins

Longest

Longest:
Amazon Nile Yangtze

Busiest

Busiest:

Yangtze Mississippi Rhine

Source: Rivers of the World

Strategic Resource for the Sustainable Development

Energy efficient: Lowest energy use among different modes

Strategic Resource For The Sustainable Development

Lowest External Cost Among 3 Modes Of Transport

Note: excluding construc@on cost

Strategic Resource For The Sustainable Development

Low Cost: Container cost example
Cost per TEU
500 450 400 350 300 250 200 150 100 50 1 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900 950 1000

IWT (208 TEU) Rail (90 TEU)

SSS (500 TEU) Road (2 TEU)

Distance in km

Note: situa@on in Western Europe Source: NEA

SWOT Analysis
Strengths
Low cost, well suited to the transport of bulk goods and large heavy units Low carbon footprint and air quality Low energy consumption High transport capacity and reliability Safe and secure Weaknesses Insufficient investment in infrastructure (waterway channelization, dredging, docking facilities, navigational aids, fleet capacity and efficiency) Weak logistical chain and poor connectivity to road and/or railways. Limited and low-density waterway network Not a door-to-door service mode Lack of technical innovation Lack of overall and long term sector development strategy and plan Inadequate regulatory framework weak enforcement of existing law and regulations Lack of cooperation and complex institutional arrangement Deficient institutional capacity Opportunities Integral part of multi-modal transport and logistical chain Adopting land use planning policies in favor of IWT Promoting tourism development Enhancing regional economic growth with transit to neighboring countries Threats
Poor water management at national and local level Development of road and railway network in competition with and in opposition to the IWT Overhead clearances of existing bridges Climate change: more extreme water situations Environmental impact of dredging and canalization Lack of awareness and policy makers support by Prevailing perceptions as slow, old-fashioned and outdated and backwardness Marginalized position of inland waterways institutions in relation to the dominant transport modes (roads, railways) in terms of resources, priority, and policy backing.

IWT: Low Carbon Transport: A Greener Future

Facts and Figures on IWT in PRC:
Largest IWT network in length and freight tonnage Navigable network: 124,600 km Classified network: 62,600 km Commercially significant: 26,000 km 2.1 billion tons in 2011 (160 million ton on Yangtze) 165,800 vessels , 87.8 million DWT including 160,700 TEU container barges Throughput of inland river ports: 3.68 Billion Tons

The Grand Canal completed in A.D. 1293, still provides an important north-south corridor from Beijing to Hangzhou

IWT Offers Value

Efficient, reliable, affordable, and safe Sustainable, clean and quite

Through STI, ADB aims to:

Create favorable conditions for the further development of the sector Improve integration of IWT into the transport network Encourage business to use the mode

Source: USACE

The Project: HUNAN XIANGJIANG IWT PROJECT Discovering the strength of IWT to add value
Government side
Insufficient financial resources for IWT Complex institutional set-up Complex project with sizeable environmental challenges Tight schedule

ADB side

THREATS & CHALLENGES

New sector Few specialized technical experience available internally Ability to move fast Scarcity of good navigation expertise worldwide

A Key Mode for sustainable

STRENGTHS & OPPORTUNITIES

transport Good sample of a coordinating mechanism for the complex Good experience with similar investments IWT gained market share in Hunan and Chongqing etc Power sales could meet operating costs of the complex

Attractive new sector for STI Broaden objectives of IWT

development

Provide capacity building Many common features with

transport and hydro projects

PPTA resources available to

strengthen the design and efficiency development Knowledge sharing with development partners

IWT in PRC : Basic Factors

Challenges: - Tonnage - Technology (renewal) - Safety - Industry structure

Vessels

500 dwt (Class IV) 1,000 dwt (Class III)

Improve Economics of the Industry

Tariff
Challenges: - Multiple water usage - Depth maintenance - Navigation aids modernization - Environmental impacts
Class Tonnage Water Depth (m) I 3,000 3.5-4 II 2,000 2.6-3 III 1,000 2-2.4 IV 500 1.6-1.9 V 300 1.3-1.6

River channel

IWT: CNY 0.02 Ton/km Rail: CNY 0.16 Ton/km Road: CNY 0.50 Ton/km www.cse.net.cn

VI 100 1.0-1.2

Challenges: - Integrated planning - Modern equipment - Containerization - Private sector participation - Intermodal connections

Terminals

Challenges: - Financing - Construction - Safety Opportunity: - Link with hydro dev.

Structure/Shiplocks

The Project: Xiang River Development Plan

Xiang River:
One of the largest tributaries of Yangtze River Growth engine of Hunan Six major cities along Xiang: 65% of Hunan GDP Poor areas upstream Fast growing traffic (traffic growth at 20% p.a)

2001 and 2005 project

XIANG RIVER PRESENT Upstream 300-500 dwt Midstream 500-1,000 dwt Downstream 1,000-2,000 dwt

By 2020, XIANG RIVER All year round 1,000 dwt upstream 2000 dwt downstream 2 regional ports and a serious of local Ports Saving more than transport cost

Projects under preparation or implementation

Upgrade and stabilize channels Construct a series of barrages and ship-locks (Tugutang Junc=on with ADB nancing)

The Project: Multipurpose Facilities Development

Flood barrage: 17 sluice gates with a 20-m span each Shiplock: 180mx23mx4m Holding four of 1,000 Ton vessels Powerhouse: 90MW Annual Utilization Hours: 358 GWh Fish pass: 774 meter

Complementary activities: Navigation aids & systems Two new inland ports Reservoir protection Institutional strengthening

Project Financing
Source MOT HPDOT Commercial bank ADB Total Amount (million $) 50.63 127.39 65.40 150.00 393.32

GOOD PRACTICE Hydropower serving Navigation Shiplocks planned and constructed Enormous increase in traffic volumes Hydropower generates: investment budget Annual income to run the complex

Assuming the electricity sale price of 0.348 CNY/kWh and the annual power generation of 358 GWh, the average energy revenue will be CNY122 million/ year.

The Project Results Framework

IPMACT
A more sustainable inland waterway transport system developed in Hunan province

OUTCOME

An efficient, safe, affordable, and sustainable inland waterway transport system developed on Xiang River

OUTPUTS

1. Tugutang navigation-cum-hydropower generation complex constructed. 2. Cargo terminal berths at Songbai and Yunji and public landing stages improved. 3. Capacity and performance of waterway management agencies enhanced.

ADB:

$150 million $178 million $66 million

INPUTS

Government: Co-financing:

The Project Institutional Innovation

Enhance co-operation with other relevant departments in areas of shipping services, power supply, flood control, irrigation and water supply

Chaired by the Governor, with nineteen agencies involved Development and Reform Commission Economic and Information Commission Hunan Department of Transport including Hunan Maritime Bureau Water Resources Resettlement Economic Committee Price Bureau Public Security Bureau Local Taxation Bureau Changsha Customs Forestry Agriculture Key Project Office

Waterway Transport Development CommiKee (WTDC)

Environmental Protection Land Resources Import-Export Inspection and Quarantine Bureau Port Administration Office of Hunan Province Hunan Office of State Administration of Taxation

Points of Interests

Leverage More Government Support to IWT

Support systems, beRer trac control, monitoring and inspec=on skills development, training Green Reward Incen=ve System to provide incen=ves for loans, innova=on, renewal/scrapping
Hunan IWT Construction and Investment Company Public Financing: special IWT fund CNY 300 million/year) Further port reform Private sector investment

Capacity Development (Safety, Sills, RIS)

Barge Moderation Program

Stable Long Term Financing

Total CNY 68 billion by 2020

WTDC Coordinate development Land use planning polices in favor of IWT Model Integration (multimodal links, ports and terminals)

Integrated waterway planning

14

Leverage the Results:

Proposed Future ADB IWT Development Approach

Linkage of Knowledge-Capacity Development-Investments

South-South Knowledge Sharing

RETA Cross country Regional Work

TA programs for capacity development Green Freight and waterway loan products for DMCs

Applica=on of Knowledge into Project Contexts (EUs Marco Polo Program)

Knowledge Dissemina=on for DMCs (Chongqing IWT Forum and ADB Transport Forum)

Thank You For Your Attention

Xiaohong Yang Lead Transport Specialist xyang@adb.org Asian Development Bank