The government is implementing a multimodal logistics system to facilitate the seamless movement of cargo and people through various modes of transport. This approach is especially relevant, given India’s focus on reducing overall logistics costs. Additionally, it will help in reducing pollution in the country. With this aim, under its flagship programme, Bharatmala Pariyojana, the centre has initiated the development of 35 multimodal logistics parks (MMLPs) to strengthen logistics infrastructure in the country.
The World Bank has conducted logistics performance index (LPI) studies across the world. The six core competencies used to measure the LPI include customs performance, infrastructure quality, consignment tracking and tracing, ease of arranging shipments, logistics service quality and timeliness of shipments. The development of freight villages in European countries has significantly improved logistics efficiency in the region.
In 2017, India’s LPI rank was 43rd globally, and currently, it ranks 38th. An improvement of one point in the LPI score results in an increase in the country’s trade by approximately 16 per cent. India has tremendous potential to further improve its logistics efficiency.
Measures taken to improve logistics infrastructure
In terms of imports and exports, when cargo arrives at any port in India, such as Cochin or Mumbai, to be transported to a distant location like Patna or Nepal, it is transported by road. However, this transportation must be done via rail. In order to increase the share of railways in freight transportation, the government is actively striving to facilitate long-distance goods transportation through rail. This route is projected to significantly decrease pollution levels and costs.
With the introduction of MMLPs, when cargo reaches the destination port, it will directly arrive at a nearby MMLP. From there, it will be shipped via rail to the destination. The MMLPs will also be equipped with core logistics services such as warehousing, freight transportation and cargo aggregation and distribution. Additionally, they will offer value-added services such as customs clearance, sorting, packaging, assembling, information technology (IT) services, affixing and printing, as well as support services such as parking, recreation facilities, and operational and maintenance services for transporters.
Responsible authorities
The investors can participate in the MMLP tenders individually or through consortiums/joint ventures. Additionally, project-specific special purpose vehicles (SPVs) are formed in collaboration with various central and state government bodies to develop MMLPs in the public-private partnership mode. Rail Vikas Nigam Limited (RVNL) has been tasked to provide a dedicated rail siding line to the MMLPs to improve rail connectivity. Railway connectivity is to be provided within four years of the appointed date. State bodies/port authorities are responsible for providing land for the development of MMLP at any proposed location. Around 90 per cent of the land allocated for Phase I of the MMLP is required to be provided by the appointed date. The Ministry of Road Transport and Highways (MoRTH) serves as an appraisal or a nodal agency in order to provide external trunk infrastructure and procure relevant approvals. Road connectivity and utilities are expected to be provided within 18 months of the appointed date.
Revenue potential for developers
Revenue for developers can be generated through user fees for warehousing, intermodal freight handling and other services. They are also allowed to sublicense project assets. Moreover, approximately 10 per cent of the total project area can be utilised for commercial development for purposes other than logistics services. In terms of development, the MoRTH has ensured maximum support for private players to facilitate ease of doing business for the development of such facilities.
Current status of MMLPs
In India, 35 strategic locations have been identified for the development of MMLPs. As of March 2024, MMLPs in Jogighopa, Nagpur, Chennai, Bengaluru and Indore have been awarded. Reliance Industries Limited (RIL) has won the Chennai MMLP, PATH India Limited has won the Bengaluru MMLP, Deltabulk Shipping India Private Limited has won the Nagpur MMLP and G R Infraprojects Limited has won the Indore MMLP. The Jogighopa MMLP is being constructed under the engineering, procurement and construction model.
Some of the prioritised MMLPs include locations such as Coimbatore, Patna, Visakhapatnam, Hyderabad, Mumbai and Jammu. Additionally, bids are currently live for the MMLPs in Anantapur, Pune and Nashik. Land has been finalised for the Nashik and Pune MMLPs. The remaining MMLPs include North Punjab, South Punjab, Solan, Hisar, Bhatinda, Ambala, Delhi-NCR, Jaipur, Kota, North Gujarat, Bhopal, Kandla, Rajkot, Valsad, South Gujarat, Raipur, Sundargarh, Kolkata, Jagatsinghpur, Cochin and Panaji.
Future masterplan for Bangalore MMLP
The Bengaluru MMLP will cover approximately 400 acres of land at the Dabaspete junction and is located at the start of the upcoming new satellite town ring road. At this juncture, the rail line originates from the Dodbele railway station, where all modal shifts will occur. Storage facilities will be readily accessible for an extended period of time, eliminating the need to transport cargo to its destination for immediate consumption. Additionally, the location will offer cold storage and climate control storage options. Efforts are under way to transport the packages and cargo in and around Bengaluru via electric vehicles (EVs). All upcoming MMLPs will be equipped with a mandatory EV charging facility, with the aim of further reducing pollution.
The MMLP will also have access to railway siding. Five different railway lines are currently in the planning stages. In terms of train line management, the key performance index is usually around eight hours. During these eight hours, the rake should arrive, be emptied and then be reloaded before departing again. Additionally, a significant amount of emphasis has been placed on mechanical handling. There have been developments in the form of cement silos and granite yards with the aim of catering to the unique needs of the city. Plans include providing truck drivers with both dorms and hotels, and approximately 3 per cent of rural area has been set aside for residential purposes to accommodate workers in warehouses. Furthermore, a skill development centre has been built and made mandatory.
Based on a presentation by Sanjeev Patil, Senior Vice-President (Logistics), National Highways Logistics Management Limited, at a recent India Infrastructure conference
