MMLPs stirring up investment in India’s logistics sector

Multimodal logistics is what connects all the different modes of transportation for efficient and speedy movement of goods, to add-ons like handling, warehousing, and distribution. And Multimodal Logistics Parks (MMLPs) is being hailed as ‘the’ way to solve India’s supply chain problems, including the high logistics costs, with their improved and integrated connectivity.

These parks, to be set up under the Logistics Efficiency Enhancement Programme (LEEP), will serve as intermodal freight-handling facilities with mechanised material handling provisions and will contain warehouses, specialised cold chain facilities, freight/container terminals and bulk/break-bulk cargo terminals. They will also include various value-added services, including labelling, packaging, tagging and crating, thereby offering a variety of services at a single location.

Lately, the Government of India has been aggressively pushing for the development of such parks throughout the country with the aim of giving a much-needed boost to logistics as well as the manufacturing industry. Back in mid-2021, MoRTH expressed its intention for developing 35 MMLPs under Public-Private Partnership (PPP) in Design, Build, Finance, Operate and Transfer (DBFOT) mode, and while announcing the Budget for FY22, our Finance Minister also mentioned that out of the 35 MMLPs planned by the Government on PPP model, contracts for 4 will be awarded in the next year.

Since then, there has been a lot of noise around the development of MMLPs in India, and they are expected to attract a private sector investment of around INR 50,000 crore and a public sector investment of around INR 25,000 crore. Of the aforesaid 35 MMLPs planned under phase 1, one project is being developed in Chennai, and the other in Nagpur. Both the MMLPs are expected to be ready by the end of 2024. When an MoU was signed last year between Jawaharlal Nehru Port Trust (JNPT) and National Highways Logistics Management Ltd (NHLML) for an MMLP at Sindhi (Maharashtra), Sh. Nitin Gadkari said that 4 MMLPs were being planned in Maharashtra, most likely at 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-acre land has been allotted for the proposed MMLP at Jogighopa (Assam) along river Brahmaputra with direct air, road, rail and waterways connectivity under Bharatmala Pariyojana.

Back in May 2022, while on one hand, PM Narendra Modi laid the foundation of Chennai MMLP in Mappedu, the Container Corporation of India (Concor) announced that they’ll be developing the upcoming MMLP in Gujarat’s Varnama Village. The MMLP will also be Concor’s first Gati Shakti Multi-Modal Cargo Terminal and will cost nearly INR 500 crore. Similar to collaboration with Concor, CBRE South Asia has been appointed by GoI as the advisor for the development of MMLPs across five key locations including Mumbai, Chennai, Silchar, Coimbatore and Hyderabad.

Earlier this month, the Madhya Pradesh government also said that it has initiated the process of land acquisition of around 250 hectares of land in Pithampur with an aim to develop a fully integrated ‘green’ MMLP, which will be developed by the Madhya Pradesh Industrial Development Corporation (MPIDC).

The proposed MMLPs in Bengaluru and Nagpur will also be closing investment bids 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 likely to gain further momentum with more MMLPs becoming functional.

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