RIL to develop India’s first multi-modal logistics park near Chennai

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).

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.

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.

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.

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.