Centre looks at logistics parks in 35 clusters

Parks would cut transport cost by 10% for industries, allow freight movement on larger trucks and rail.

As many as 35 clusters, accounting for half of all freight movement, have been identified for building multimodal logistics parks (MLPs) to improve transportation and warehousing in the country.

Of the total number of proposed parks, 15 would be developed across Punjab, Haryana, Gujarat, Maharashtra and Uttar Pradesh.

The proposed parks would reduce transportation cost by a tenth for industries in the 35 clusters, enabling freight movement on higher sized trucks and rail, Union road transport, highways and shipping minister Nitin Gadkari told Business Standard.

Locations for development of MLPs have been prioritised based on the level of production and consumption activity in a particular city, as measured by freight flows, quality of road and rail connectivity to there and its importance in international trade, he said.

The first MLP would come up in the next two years. "Given the scale of the investment and the complexities involved, the timelines are challenging. However, we are confident of achieving this,” Gadkari said.

Increased freight movement on higher sized trucks and rail will result in reduction in freight vehicles. In addition, shifting of warehouses and wholesale markets, currently being operated inside the city, to logistics parks would free up urban spaces and further reduce warehousing costs.

National Highways Authority of India would be the nodal agency for development of the first set of MLPs. It would form a Special Purpose Vehicle (SPV) with state governments. Within the SPV, states are expected to provide land for the MLPs.

The NHAI will be responsible for developing the required trunk infrastructure, in collaboration with railways and other ministries/ authorities.

Central government authorities would have to develop dedicated trunk infrastructure connectivity -- highways, rail or port connectivity to the MLPs. The parks themselves would be developed and operated by private players.

Increased freight movement on higher sized trucks and rail will enable a 12 per cent reduction in carbon emissions in phase-I.

Two cities, Chennai and Vijayawada, have already identified land parcels for development of logistics parks. Pre-feasibility study will soon begin in these two cities.

That apart, improving the efficiency of existing freight corridors and building new ones is a pressing need, the official said. Potential benefits of new ones would include a higher average speed of freight vehicles plying on the national corridors, expected to increase by 10 per cent once choke points are removed.

Of a network of 56,000 km, NHAI has identified 32,000 km as requiring intervention. Of this, the process for giving bids for detailed project report preparation has been initiated for 14,000 km.