Multi-Modal Logistics Parks set to reduce cost of logistics in India

Ministry of Road Transport and Highways will develop 35 such parks across the country.

New Delhi: The Ministry of Road Transport and Highways (MoRTH) has initiated several steps to develop a strong network of Multi-Modal Logistics Parks (MMLPs) across the country with a view to reduce logistics cost, which in turn is expected to accelerate economic growth in a big way. Currently, the cost of logistics in India is 13-14% of GDP. However, in developed countries, it is around 8%. Therefore, specific focus is being laid by the government to minimize this cost of logistics and bring it closer to the level of developed countries.

Under the “Bharatmala Pariyojana”, approved by the Cabinet Committee on Economic Affairs (CCEA), MoRTH is entrusted to develop 35 Multi Modal Logistics Parks (MMLPs) across the country. An MMLP will be connected with minimum two modes of Transport. It acts as an inter-modal freight-handling facility with mechanized material handling provisions which contains warehouses, specialized cold chain facilities, freight / container terminals and bulk / break-bulk cargo terminals.

Typically, MMLPs include inter-modal connectivity such as dedicated Railway line, access from prominent Highways or Expressways to allow movement of commercial vehicles and connectivity to an airport or a seaport (or inland waterway terminal).

Construction work at India’s first MMLP at Jogighopa (Assam) is on the verge of completion. Early this month, the Ministry awarded Multi Modal Logistics Park (MMLP), Chennai project, to Reliance Industries Limited. The estimated cost of the project is Rs 1,424 crore. On the other hand, financial sanctions have already been issued for development of two other MMLPs at Bengaluru and Nagpur, while financial sanction for MMLP Indore will be issued shortly.

In order to have a focused approach towards its implementation, a dedicated SPV named as “National Highway Logistics Management Limited” (NHLML), a fully owned company of NHAI, has been formed by MoRTH. This SPV will also implement other allied Highway Infrastructure, such as Way Side Amenities, Ropeways etc. The Ministry has also finalized “Model Concession Agreement (MCA)” on PPP for MMLPs after stakeholders’ consultation and due deliberations, discussion and recommendation through Inter-Ministerial Committee (IMC). The MCA includes market-friendly measures such as higher concession period of 45 years, concept of revenue sharing, providing external connectivity (road, rail etc) and utility (electricity, water supply etc). The statutory clearances are to be provided by the Government, as per the MCA.
The Chennai project is being developed at Mappedu (Thiruvallur district), Tamil Nadu, in 184 acre area. The site is located about 52 km from Chennai Port, 80 km from Ennore Port and 87 km from Kattupalli Port and 44 km from Chennai Airport. The MMLP Chennai is the first MMLP project of MoRTH, which will be developed on PPP basis, under the “Bharatmala Pariyojana”.

Interestingly, the foundation stone for the Chennai MMLP was laid by Prime Minister Narendra Modi on 26 May this year. Development of MMLPs is also a key component of the “PM Gati Shakti” National Master Plan, which has been a major focus area of the Narendra Modi government.

The MMLPs are planned to have multi-faceted value-added logistics services at a single site, including large-scale warehousing and cold storage, railway terminal and container yard, mechanized inter-karting facilities, customs windows, assembly and packaging chains, open storage yards, truck terminals, ICT enabled access to cargo trucks, digital weighbridges, amenities for truck drivers etc.

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