Logistics parks get mega push; 4 hubs to be set up

Discussion with states has begun on the Union government’s mega programme to build logistics parks across the country.

The Union Cabinet last month approved setting up of logistics parks at 35 locations under the Bharatmala programme. Work was to first start at Mumbai, Bengaluru, Surat and Nagpur for warehousing hubs. “Preparation of the detailed project report has started and in the next two-three months, project award would take place,” an official, requesting anonymity, told Business Standard.

The Ministry of Road Transport and Highways has asked the governments of Andhra Pradesh and Tamil Nadu to change the proposed locations for a park each in Vijayawada and Chennai. The ministry and the National Highways Authority of India (NHAI) felt the sites indicated by both states weren’t suitable; “they would not have garnered enough volumes to sustain”, the official said.

“For a logistics park, location is everything — for instance, if one train rake can go to a location, then 10 trucks should not be used; otherwise the site is no use,” said Abhaya Agarwal, partner at consultants EY India. He says a logistics park, a multimodal one at that, should be either closer to an industrial cluster or near a rail head to be successful.

The idea for the parks were announced by Finance Minister Arun Jaitley in Union Budget 2017-18. Development of multimodal ones and an effective transport system would, he had said, make the economy more competitive.

Earlier this month, the Cabinet cleared the proposal for 44 “economic corridors” and 24 multimodal logistics parks, in the first phase, to facilitate efficient movement of freight along routes of economic importance. The multimodal parks are being planned as centres of freight aggregation, with warehousing, cold storage and like facilities. These are to be built along national highways, outside cities, helping to reduce traffic congestion and pollution.

These and the economic corridors are also aimed at faster movement of farm produce to food processing centres and to markets. The government is hopeful that these will raise the income of farmers, give a boost to the food processing industry and create a large number of jobs.

The Bharatmala project was cleared in October, to construct 20,000 km of highways connecting the western and eastern parts of the country, at an estimated ~7 lakh crore.