MMLPs boost investment in logistics sector in India

NEW DELHI: Multimodal logistics is what connects all the different modes of transport for efficient and rapid movement of goods, with complementary modules such as material handling, warehousing and distribution. And Multimodal Logistics Parks (MMLP) is hailed as “the” way to solve India’s supply chain problems, including high logistics costs, with their improved and integrated connectivity.

These parks, to be created as part of the Logistics Efficiency Improvement Program (LEEP), will serve as intermodal cargo handling facilities with mechanized handling provisions and will contain warehouses, specialized cold chain facilities, cargo/container terminals and bulk/breakbulk cargo terminals. They will also include various value-added services including labeling, packaging, labeling and crating, providing a variety of services in one place.

Lately, the Indian government has been pushing for the development of such parks across the country in a bid to give a much-needed boost to logistics as well as manufacturing. Back in mid-2021, Death has expressed its intention to develop 35 MMLPs in public-private partnership (PPP) in Design, Construction, Financing, Operation and Transfer (DBFOT) and while announcing the budget for FY22, our Minister of Finance also mentioned that of the 35 MMLPs planned by the government on the PPP model, contracts for 4 will be awarded next year.

Since then, there has been a lot of noise around the development of MMLPs in India, and they are expected to attract private sector investment of around INR 50,000 crore and public sector investment of around INR 25,000 crore. Of the aforementioned 35 MMLPs planned under Phase 1, one project is under development in Chennai and the other in Nagpur. Both MMLPs are expected to be ready by the end of 2024. When a Memorandum of Understanding was signed last year between Jawaharlal Nehru Port Trust (JNPT) and National Highways Logistics Management Ltd (NHLML) for an MMLP in Sindhi (Maharashtra), Sri. Nitin Gadkari said 4 MMLPs were planned in Maharashtra, most likely in Jalna, Nasik, Solapur and Sangli.

In October 2021, the Chief Minister of Assam also said that a sum of INR 693.97 crore and 317 acres of land has been allocated for the proposed MMLP at Jogighopa (Assam) along the Brahmaputra River with connectivity direct air, road, rail and river under Bharatmala Pariyojana.

In May 2022, while on the one hand, PM Shri Narendra Modi laid the foundation for Chennai MMLP in Mappedu, the Container Corporation of India (Concor) announced that they will develop the next MMLP in the village of Varnama in Gujarat. The MMLP will also be Concor’s first Gati Shakti multimodal freight terminal and will cost almost INR 500 crore. Similar to the collaboration with Concor, CBRE South Asia has been appointed by the GoI as an advisor for the development of MMLPs in five key locations including Mumbai, Chennai, Silchar, Coimbatore and Hyderabad.

Earlier this month, the Madhya Pradesh government also said it had started the process of land acquisition of around 250 hectares of land in Pithampur with the aim of developing a fully integrated “green” MMLP, which will will be developed by the Madhya Pradesh Industrial Development Corporation (MPIDC).

The proposed MMLPs in Bengaluru and Nagpur will also close investment offers soon. The Bengaluru MMLP will require a venture of INR 935.90 crore from the confidential area and will be granted in September. The MMLP in Nagpur will require a private sector investment of INR 599.39 crore and is expected to be awarded in October.

Investment activity in the logistics sector is expected to accelerate as more MMLPs come online.