India's state-run Inland Waterways Authority will use public-private joint ventures to acquire 16 vessels at a cost of Rs600m ($13.5m).

The proposed 2,000 dwt vessels will be owned by three joint ventures set up for the purpose over the next few weeks, with the IWAI having a 30% equity stake in each of them.

One of these will be with Vivada, an inland water transport company, and two will be forged with the Mumbai-based coastal shipping firm SKS Shipping (formerly Shahi Shipping).

'A similar partnership will be set up with the National Thermal Power Corp which needs vessels to ferry coal between Haldia port and its plant at Farakka,' said a high-ranking IWAI official.

'We estimate that 30 vessels will be required exclusively for moving around 3m-4m tonnes of coal along National Waterway 1.'

The authority has also received permission from the government to set up joint ventures for the construction of three jetties on NW-1 in West Bengal state at Bandel, Kolaghat and Budge Budge.

Even though inland water transport is an inexpensive process compared to road and rail, the existence of several obstacles has prevented it from becoming a real success.

Lengthy travel time is a major deterrent and the poor state of the vessels currently being employed sends operating costs soaring and renders commercial operations unattractive and unviable.

In addition, the existing three national waterways are not fully functional.