February 8, 2026

Centre to develop water metros in 9,280 crore push to promote eco-friendly public transport alternative

Separately, the Ministry of Ports, Shipping and Waterways has drafted India's first National Water Metro Policy to make water metro systems an integral part of the broader urban mobility framework.

The Centre is readying a £9,280 crore scheme to part fund development of water metro systems across the country in partnership with the state governments and private sector as it seeks to tap vast swathes of rivers, canals, lakes, backwaters, estuaries, creeks and coastal waters to ease the burden on roads and promote a sustainable public transport alternative.

The scheme is a part of the draft National Water Metro Policy 2026 prepared by the Ministry of Ports, Shipping and Waterways.

The water metro projects will connect city centres with nearby areas and islands for daily passenger movements, tourism purposes, and will be integrated with other transport modes.

A water metro is a mechanically propelled, mass passenger transport system operating in inland, coastal, or other water bodies, designed for systematic movement of people and where applicable, vehicles and may include passenger vessels and Ro-Pax.

Water metro services use modern, standardised vessel designs equipped with prescribed safety, accessibility, environmental protection features, and function as part of an organised public transport network.

The water metro in Kochi is the only such project operating in India.

In February 2025, the Inland Waterways Authority of India (IWAI) commissioned feasibility studies for water metro systems in 18 cities that were picked on urban scale, navigable waterways, and existing ferry usage. The estimated approximate cost of the project ranges between ₹800–1,300 crore for each project, translating into an overall capital expenditure of some ₹18,594 crore.

The scheme will run for 10 years from April 2026 for which the estimated budget outlay for Central government’s share of the funds (50 per cent) for the capital expenditure is ₹9,280 crore, according to the draft scheme seen by ET Infra.

Based on the model selected, the Centre and the state government will contribute equally to fund the EPC component of capital expenditure (for each project) and/or 50 per cent of the Viability Gap Funding (VGF) for PPP component of the capital expenditure (for each project).

The state government will provide VGF, if required, to the city level Special Purpose Vehicle (SPV) formed for the operation of water metro. It will also provide land (free of cost) and cover costs incurred for acquisition of any additional land for development of water metro.

The Ministry of Ports, Shipping and Waterways will be the nodal ministry and approving authority for projects under the scheme.

The Inland Waterways Authority of India will act as the nodal authority for water metro projects under the scheme. It will be responsible for developing and enforcing technical standards and guidelines for water metro projects, including formulating uniform specifications for vessels to ensure safety, reliability and operational efficiency.

City-level SPV

A city-level SPV will be set up jointly by the Centre and state government for implementing the projects.

The city-level SPV will be responsible for development of infrastructure either through EPC or Public Private Partnership (PPP) or Hybrid model and operations of the water metro systems either in-house or through Operations and Maintenance (O&M) contract.

The cost of operations will be borne by the city-level SPV and any VGF required for either in-house or Operations and Maintenance contract-based operations of water metro will be borne by the state government.

Fare will be determined by the SPV per the applicable legal and regulatory framework.

Project implementation and operation models

To ensure flexibility and efficiency in delivering water metro service, the scheme provides multiple implementation models that are designed to accommodate varying project complexities, operational requirements, and private sector participation levels. Each model specifies the approach for infrastructure development, operational management, and VGF/subsidy required under the scheme.

Model 1A

Model 1A involves EPC-based infrastructure development (including vessels) with in-house operations wherein the Centre and the state government will provide equal funding for the capital expenditure of the project. The operations and maintenance will be undertaken by city level SPV and operational VGF (if required) will have to be borne by the state government.

Model 1B

Under Model 1B, infrastructure development (including vessels) will be undertaken through EPC wherein the Centre and the state government will pool the capital expenditure of the project equally. The operations and maintenance will be undertaken through a private Operations and Maintenance contract and operational VGF (if required) will be borne by the state government.

Model 2

Model 2 will use the PPP route for infrastructure development and operations and maintenance. Under this model, the Centre and the state government will provide funds equally for the VGF for capital expenditure on the project, while operational VGF (if required) should be borne by the state government.

Model 3

Model 3 prescribes a SPV-led EPC-based infrastructure development with PPP for vessels and Operations and Maintenance. In this model, the Centre and state government will share funds equally for capital expenditure while PPP will take care of vessel procurement and Operations and Maintenance. The Centre and the state government will provide funds equally for VGF for vessel procurement and operational VGF (if required) will be borne by the state government.

The state government or IWAI will be given the authority to select the implementation model from the four options.

The state government will have to undertake dredging and maintaining fairways for projects on waterways other than National Waterways.

The scheme will cover civil infrastructure such as major terminals, intermediate terminals, minor terminals, development of access road and non-motorized transport, multimodal integration, floating pontoons, gangway, fenders, operation control centre, fuel jetty, night parking jetty, boat yard, boat charger terminal side infra facilities, marine infrastructure including boat, emergency response cum work boat and dredger; navigational infrastructure such as intelligent transport system, navigational aids; and sustainable development such as solar farm, weed harvester, water harvesting, disaster management/resilience initiatives, electric feeders, bicycle sharing and walkways.

The vessels procured for water metro systems will be green (electric, hybrid), indigenously designed and built by Indian shipyards, adhering to all applicable mandates to fulfil the objective of promoting domestic manufacturing. Aggregation of demand through standardised designs and bulk procurement will be encouraged to achieve economies of scale, negotiate competitive costs, and progressively enhance localization of the components across the water metro ecosystem.

The scheme seeks to make water metro an alternative public transport option and ease congestion on roads, promote sustainable public transport by adopting cleaner technologies and reducing reliance on fossilfuel-based travel, thereby contributing to environmental protection.

Rapid growth of Indian cities with increasing population, increased focus on economic activity and rapid urbanisation has resulted in transport problems, says the draft National Water Metro Policy.

Urban transport in India is struggling with congestion, air pollution, inadequate public transit options, and high fossil fuel-dependence. Aligned with the objectives of the Harit Nauka Guidelines, the water metro policy prioritises green transportation by promoting clean-fuel, low-emission vessels. By leveraging energy-efficient inland waterways and adopting electric or hybrid propulsion systems, the initiative aims to significantly reduce the carbon footprint of urban transit.

Rapid growth requires various modes of transportation, but the availability of land for new transport infrastructure is becoming increasingly constrained. The water metro model addresses this limitation by utilising existing navigable waterways to create a robust, reliable, and environmentally sustainable urban transport network. It represents an innovative shift in city mobility, offering safe, efficient, cost-effective, and eco-friendly alternatives to conventional road-based systems, according to the draft policy.

Currently, Mass Rapid Transit Systems (MRTS) frameworks primarily encompass BRTS (Bus Rapid Transit System), LRT (Light Rail Transit), tramways, metro rail, and regional rail systems, with inland waterway- based transport largely remaining outside the formal public transport ecosystem.

A dedicated water metro policy would provide a structured, coordinated approach between the Centre and states, positioning waterways as a formal component of urban public transport alongside existing MRTS modes. The policy would promote an ecosystem-based framework focused on standardisation, safety, technical efficiency, and sustainable system design, including a transition to low-emission and green propulsion technologies.

At present, the technical and operational expertise with respect to inland water-based transport involving project identification, appraisal, vessel specification and safety oversight largely resides with IWAI. A common framework will help ensure water metro systems develop in a coordinated and consistent manner, enabling standardised safety practices, streamlined vessel designs, clear institutional arrangements, scalable and replicable implementation across cities, says the draft policy.

The draft policy has suggested models such as joint Centre-state funding, fully state-funding, PPP-led development and Centre-funded models for implementing water metro projects with support through VGF and central sector scheme.

source : infra.economictimes.indiatimes.com