On Friday, the Ministry of Road Transport & Highways awarded the contract for setting up India’s first multi-modal logistics park near Chennai to Reliance Industries.
“Pioneering the pace of building a countrywide state-of-the-art multi-modal infrastructure, MoRTH has made significant progress under the NMP and embarking on the same MMLP Chennai at Mappedu being developed in 184.27 acres is the first MMLP awarded to RIL for which Prime Minister laid the foundation stone on May 26, 2022,” the Road Ministry said in a statement.
The ₹1,424-crore project will facilitate the transport of cargo throughout India by upgrading and expanding road, rail, air and maritime infrastructure. It will contribute to better freight logistics services such as convenient cargo dispatch, quick distribution, task-specific handling and more.
The National Highways Logistics Management (NHLM) received bids from three companies for the Chennai MMLP, including Adani Group. The two companies that ‘technically qualified’ for the financial bidding process were allowed to continue. The model concession agreement for MMLPs is on Design, Build, and Operate & Transfer (DBFOT) basis.
The MMLP is strategically located around 52 km from the Chennai Port, 80 km from Ennore Port and 87 km from Kattupalli Airport. It should cater to around 7 million tonnes of cargo coming into this region over 45 years.
The MMLP is close to industrial clusters like the automotive and electronics manufacturing area on the Sriperumbudur-Oragadam belt. Further, it’s just outside of Chennai and is close enough to access areas like the Chennai Peripheral Ring Road (CPPR), a senior official of the ministry said.
“Chennai is an important centre for supply chain and logistics in south India. Also, it has international and domestic connectivity, which makes the MMLP a game-changer for the region. The park will offer facilities such as warehouses, cold storage, cargo terminals, custom facilities, truck terminals, and accommodation and boarding facilities for truckers. It will allow shippers to choose between different modes of transportation based on their requirements,” he added.
The project was conceived over a decade but received a poor response from the private sector due to connectivity issues. In October 2021, an MoU was signed among Tamil Nadu Industrial Development Corporation, National Highways Logistics Management Limited and the Chennai Port Trust.
The new project will be close to Chennai Peripheral Ring Road and will be connected to the Chennai airport and the ports of Chennai, Kamarajar & Kattupalli.
The project will have secondary market clusters in Ranipet, Ambur, Tirupur and Bengaluru with industries like leather, heavy machinery parts, automobiles, cement, sugar & chemicals. The project is located in Bengaluru which is home to its own industry field. Industry sources said that rail connectivity from Mappedu to the ports will be crucial for the project’s success.
In order to establish the first MMPL, the Centre & Tamil Nadu govt. have come together to form an SPV (special purpose vehicle) with the participants of National Highways Logistics Management, Rail Vikas Nigam, Chennai Port Authority and Tamil Nadu Industrial Infrastructure Development Corporation.
“The estimated project cost is ₹1,424 crore and the total concession period is 45 years. The SPV will provide 4-lane national highway connectivity of 5.4 km with an estimated cost of ₹104 crore and new rail siding to the MMLP site of length around 10.5 km with an estimated cost of ₹217 crores.
The park will be developed in three phases with an estimated developer investment of ₹783 crores. The Phase-1 development is targeted within two years, by 2025, leading to commercial operations.”, said an official.
MMPL’s will play an important role in reducing logistics costs. In India, logistics costs as a percentage of GDP are high at 16 per cent, while in the US & Europe the percentage is closer to 8% and about 10 % for China. The government wants to bring down the logistics cost to 10 per cent of the GDP.
The PM Gati Shakti National Master Plan (NMP), launched in October 2021, will provide 35 national multi-modal logistics parks and plans to complete 15 of them within the next three years.