India’s First Multi-Modal Logistics Park

Multi Modal Logistics Park Background

• The Multi Modal Logistics Parks will be set up under the Logistics Efficiency Enhancement Program (LEEP).
  • LEEP was proposed in 2015 under the Ministry of Road Transport and Highways (MoRTH) to improve India’s logistics efficiency.
• The MoRTH and the National Highways Authority of India (NHAI) are planning to establish a total of 35 MMLPs across the country over the next few years.
• Under the National Logistics Policy (NLP) and PM-Gati Shakti, the government wants to bring down logistics costs to under 10 per cent of the GDP in a bid to make exports competitive and supply chains more efficient.
  • India’s logistics cost is 14% approximately. In developed economies such as the US, logistics cost accounts for only 8%– 10% of GDP.

Multi Modal Logistics Park Features in India

• Location &Areal extent: India’s first Multi Modal Logistics Parks is being set up in Mappedu village in Thiruvallur district, near Chennai. It will be spread over 184 acres and cost Rs 1,424 crore.
• Strategically placed: The project site is strategically located 52 Km from Chennai Port, 80 Km from Ennore Port, and 87 Km from Katupalli Airport and will be a focal point of logistics in the southern region.
• Parent project: The MMLP near Chennai will be implemented under the PM Gati Shakti National Master Plan, which was launched in October 2021.
• Special Purpose Vehicle (SPV): The project will get adequate connecting infrastructure support through a SPV formed between central and state agencies.
  • The SPV will provide 4 lane national highway connectivity of 5.4 km and a new rail siding to the MMLP site of 10.5 Km.
• Public-Private-Partnership (PPP): The MMLP will be developed in PPP mode and RIL emerged as the winning bidder for the project.
• Operating model: The model concession agreement for this project is on a Design, Build, Finance, Operate, and Transfer (DBFOT) model.
• Phases of the project: The MMLP will be developed in 3 phases. The Centre expects the first phase of the project to be completed in two years.
• Capacity: The MMLP near Chennai is estimated to cater to 7.17 Million Metric Tonne (MMT) cargo in a horizon period of 45 years.

What are Multi Modal Logistics Parks (MMLPs)

• A MMLP is an inter-modal freight-handling establishment comprising warehouses, dedicated cold chain facilities, freight or container terminals and bulk cargo terminals eases and optimizes merchandise movement via road, rail, waterway and air, consequently, rationalizes the cost of logistics and improves the competitiveness of logistics.
• Characteristics of Modern Multi Modal Logistics Parks:

• Hub & Spoke Model: Developed under a ‘Hub & Spoke’ model, the MMLP will integrate multiple modes of freight transport through highways, railways & inland waterways.

• Advantages of Multi Modal Logistics Parks:
  • Improve efficiency of logistics sector: MMLPs aim to improve India’s freight logistics sector by lowering overall freight costs and time, reducing warehousing costs, improving the tracking of consignments and more.
  • Reduction in carbon emissions: Freight movement by rail has 65 per cent lower CO2 emissions compared to road freight on a per tonne per kilometre basis. With India targeting 45 per cent reduction in carbon intensity by 2030, MMLPs will go a long way in reducing freight pollution.
  • Reduced congestion: Increased freight movement on higher-sized trucks and rail will lead to a 20 per cent reduction in freight vehicles catering to the demands.

PM Gati Shakti National Master Plan (PMGS-NMP)

• Launch: It was launched in October 2021 for providing multimodal connectivity infrastructure to various economic zones.
• Seven Engines: The scope of PMGS-NMP will encompass the 7 engines for economic transformation, seamless multimodal connectivity and logistics efficiency namely: Railways, Roads, Ports, Waterways, Airports, Mass Transport, and Logistics Infrastructure.
• The Vision of PM Gati Shakti:
  • It will incorporate the infrastructure schemes of various Ministries and State Governments like Bharatmala, Sagarmala, inland waterways, dry/land ports, UDAN etc.
  • Economic Zones like textile clusters, pharmaceutical clusters, defence corridors, electronic parks, industrial corridors, fishing clusters, agri zones will be covered to improve connectivity & make Indian businesses more competitive.
  • It will also leverage technology extensively including spatial planning tools with ISRO imagery developed by BiSAG-N (Bhaskaracharya National Institute for Space Applications and Geo-informatics).
• Gati Shakti — a digital platform — will bring 16 Ministries including Railways and Roadways together for integrated planning and coordinated implementation of infrastructure connectivity projects.

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