Friday, July 1, 2022

Discount boon for multi-model logistics

New Delhi : The Center has extended the grace period for its ambitious multi-model logistics parks (MMLPs) scheme from 30 to 45 years, a senior official of the agency implementing the project said, adding a tweak that could attract long-term investors. The story of India’s infrastructure. The government plans to build 35 mega freight-and-transport hubs under its flagship Bharatmala scheme, aimed at improving freight mobility, efficiency and reducing logistics costs.

Prakash Gaur, chief executive of National Highways Logistics Management Limited (NHLML), which was set up by the National Highways Authority, said the extended grace period, the longest period in the infrastructure sector, would help investors recoup their investments and create surpluses. Of India.

The Union Ministry of Roads has made it mandatory for NHLML to implement MMLP and implement connectivity with port links.

“MMLPs will be developed in each phase (approximately three) over a period of five years. This would have given investors about 15 years to recoup their investment and earn extra income. Each MMLP is expected to require overs An investment of Rs 1,000 crore, a grace period of 45 years will give the necessary impetus to the scheme, “Gaur said in an interview.

Spread over at least 100 acres, MMLPs will be established as public-private partnerships, with total capital investment. 50,000 crore. The purpose of these parks is to transform the existing point-to-point logistics model into a hub-and-spoke model. Here, cargo from various locations will reach one hub, where it will be stored before being sent to another hub, after which it will move to other smaller locations. Multi-model logistics parks will allow uninterrupted freight aggregation, warehousing and distribution, and provide value-added services such as customs clearance and IT services.

This is expected to reduce India’s high logistics spending to 13-14% of GDP on a single-digit level, as in most advanced economies.

The government may bid for at least four multi-model logistics parks during the new concession period this year, Gaur said. These include Chennai MMLP, which is expected to bid in July, and Nagpur, Bangalore and Indore in August.

Detailed project reports for dozens of other multi-model logistics parks are in the final stages and once they become available, more tenders may be invited this year or early next year, Gaur said.

However, after 45 years, this facility will be returned to the government. Under the previous 30-year plan, the operator had the right to first refuse a 30-year extension.

Road Transport Minister Nitin Gadkari laid the foundation stone of India’s first MMLP at Jogighopa in Assam in October last year.

“Every MMLP requires a lot of investment 1,000 crore, and in this context, the long grace period will definitely increase the interest of investors in these important infrastructure projects. But beyond the duration of the operation, the location of these facilities will hold the key to bringing investment. Multi-modal logistics parks near ports or airports will provide opportunities to develop the right infrastructure for the transfer of goods and trade with single window facilities for export and import, ”said Arindam Guha, partner and leader, Government and Public Services, Deloitte India.

In addition to the long discount period, the government has planned several other measures to make the multi-model logistics park attractive to investors, including changing the bid parameters and adding them to the minimum guaranteed revenue share and facilitating exit clauses for the original investors. Bringing joint venture partners at different stages of the project.

Gaur said the multi-model logistics parks are attracting good investor interests and the results will be seen when the projects are awarded later this year.

Anil G. Verma, Executive Director and Chairman, Godrej & Boys, said, “Focusing on the logistics sector through the PM Gati Shakti Yojana will boost the economy.”

“India’s logistics costs are the highest in the world. Building infrastructure is the best way to reduce costs and bring competitiveness to the economy to serve both domestic markets and exports. Initiatives to encourage investment from the private sector by taking the lead in government investment 7.5 trillion is commendable, “said Verma.

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