The Ministry of Road Transport & Highways on Friday said it has awarded the contract of setting up India’s first multi-modal logistics park (MMLP) near Chennai to Reliance Industries (RIL).

“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 acre 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 efficient, cost-effective and value-added logistics services such as cargo aggregation and disaggregation, distribution, inter-modal transfer, sorting, packing, repacking, etc.

The National Highways Logistics Management (NHLM) had received three bids, including Adani Group, for the Chennai MMLP. Two bidders had technically qualified for the financial bid opening. The model concession agreement for MMLPs is on a Design, Build, Finance, Operate, and Transfer (DBFOT) model.

Mappedu MMLP

The MMLP is strategically located at around 52 km from the Chennai Port, 80 km from Ennore Port and 87 km from Kattupalli Airport and will be a focal point of logistics in the southern region. It is estimated to cater to around 7.17 million tonnes (mt) cargo over 45 years.

The MMLP, which is coming up at Mappedu village in Thiruvallur district, is close to the automobile and electronics manufacturing clusters on the Sriperumbudur-Oragadam industrial belt. Besides, it is in close proximity to 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 storages, cargo terminals, custom facilities, truck terminals, accommodation and boarding facilities for truckers. It will allow shippers to choose between different modes of transportation based on their requirements,” he added.

It’s been over a decade since the project was conceived but it did not take off due to poor response from the private sector on issues like connectivity. In October 2021, a Memorandum of Understanding was signed among Tamil Nadu Industrial Development Corporation, National Highways Logistics Management Limited and the Chennai Port Trust. The project being close to Chennai Peripheral Ring Road will connect the Chennai airport, and also the ports of Chennai, Kamarajar and Kattupalli. The project will also serve as secondary market clusters of Ranipet, Ambur, Tirupur and Bengaluru which is home to industries like leather, heavy machinery parts, automobiles, cement, sugar and chemicals, according to a pre-feasibility report. Industry sources said that rail connectivity from Mappedu to the ports will be crucial for the project’s success.

Centre-State partnership

To set up the country’s first MMLP, the Centre and Tamil Nadu government have come together to form a special purpose vehicle (SPV), which is amongst National Highways Logistics Management, Rail Vikas Nigam, Chennai Port Authority and Tamil Nadu Industrial 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 crore.

The park will be developed in three phases with estimated developer investment of ₹783 crore. The Phase-1 development is targeted within two years, by 2025, leading to commercial operations.

Logistics costs

MMPLs will play a crucial role in reducing logistics costs. India’s logistics cost as a percentage of GDP is very high at 16 per cent, while in developed countries such as the US and Europe, it is around 8 per cent. China’s logistics costs are 10 per cent. The government wants to bring down the logistics cost to 10 per cent of GDP.

Under the PM Gati Shakti National Master Plan (NMP), launched in October 2021, the Road Ministry is developing 35 MMLPs, of which 15 MMLPs are being prioritised in the next three years.