Odisha's National Waterway-5 Poised to Revolutionize Freight Transport and Boost Economy
In a significant development for India's maritime infrastructure, Union Finance Minister Nirmala Sitharaman announced during the Budget 2026 presentation the operationalisation of 20 new National Waterways over the next five years. The flagship project leading this initiative is the long-pending National Waterway-5 (NW-5) in Odisha, with an estimated investment of Rs 12,204 crore.
A Project Reborn After Years of Delays
Originally proposed in 2008 as an economical and environmentally friendly transport alternative, NW-5 faced numerous obstacles that stalled its progress. These challenges included lack of support from various agencies, financial constraints, and viability concerns. Despite the Odisha government signing a memorandum of understanding with the Inland Waterways Authority of India (IWAI) in June 2014, the project remained in limbo for years.
The recent Budget announcement has injected new life into this ambitious undertaking. According to officials, the establishment of the Odisha Maritime Board has created renewed momentum to expedite the project's implementation.
Strategic Connectivity and Economic Impact
The proposed 588-kilometer waterway will create vital connections between:
- Mineral-rich regions such as Talcher and Angul
- Industrial centers including Kalinganagar
- Major ports at Paradip and Dhamra
This strategic alignment along the Brahmani river and Mahanadi delta will facilitate the transportation of coal, minerals, and steel products, shifting freight from congested roads and railways to waterways.
Implementation Framework and Financial Commitments
A special purpose vehicle (SPV) has been reconstituted to oversee the project's execution, bringing together key stakeholders:
- Odisha state government
- Inland Waterways Authority of India (IWAI)
- Paradip Port Trust
- Mahanadi Coalfields Limited (MCL), a Coal India subsidiary
The Odisha government has committed substantial support, including providing necessary land and financial assistance up to Rs 4,000 crore. A fresh feasibility study conducted by IIT Madras has validated the project's viability, with total estimated costs ranging between Rs 12,000-13,000 crore.
Multiple Benefits for Odisha and Beyond
Odisha's Commerce and Transport Secretary Usha Padhee highlighted several advantages of NW-5:
- Reduced logistics costs through modal shift from road and rail to waterways
- Decongestion of transport networks in the region
- Lower carbon emissions aligning with India's sustainability goals
- Employment generation across the logistics value chain
- Strengthened multimodal connectivity between industrial clusters and coastal ports
Odisha Chief Minister Mohan Charan Majhi welcomed the Budget announcement, emphasizing that NW-5 would help the state emerge as a premier industrial and logistics hub on India's east coast. The project is expected to stimulate regional economic growth while advancing port-led industrialization strategies.
Recent Developments and Future Outlook
During India Maritime Week 2025 in Mumbai, a crucial memorandum of understanding was signed between IWAI, Paradip Port Authority, Odisha Maritime Board, and the Ministry of Coal, formalizing the operationalisation of NW-5 with the Rs 12,204-crore investment.
The IWAI has already prepared the detailed project report with assistance from IIT Madras, including design and engineering of cross structures along the waterway. This comprehensive preparation suggests the project is moving from planning to implementation phase after nearly two decades of anticipation.
Beyond its immediate transportation benefits, NW-5 represents a strategic investment in Odisha's economic future, potentially transforming the state into India's next maritime powerhouse while contributing to national goals of sustainable development and infrastructure modernization.
