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Investment in India’s logistics sector is being driven by MMLPs

Logistics

With their enhanced and integrated connectivity, Multimodal Logistics Parks (MMLPs) are being lauded as “the” solution to India’s supply chain issues, especially the high logistics costs

Under the Logistics Efficiency Enhancement Programme (LEEP), these parks will be built to serve as intermodal freight-handling facilities with mechanized material handling capabilities. They will include warehouses, specialized cold chain facilities, freight/container terminals, and bulk/break-bulk cargo terminals. In addition, they will offer a range of services at a single site by giving value-added services including labeling, packing, tagging, and crating. To provide the industrial and logistics sectors of the economy a much-needed boost, the Indian government has recently been pushing hard for the creation of these parks around the nation. Our Finance Minister also mentioned that out of the 35 MMLPs planned by the Government on the PPP model, contracts for 4 will be awarded in the following year. Back in mid-2021, MoRTH expressed its intention to develop 35 MMLPs under Public-Private Partnership (PPP) in Design, Build, Finance, Operate, and Transfer (DBFOT) mode.

Since then, there has been a lot of talk about the growth of MMLPs in India, and it is anticipated that they will draw investments from the private and public sectors totaling around INR 50,000 crore and INR 25,000 crore, respectively. One project is being constructed in Chennai and the other in Nagpur out of the aforementioned 35 MMLPs scheduled under phase 1. By the end of 2024, both MMLPs are anticipated to be completed. When a Memorandum of Understanding (MoU) for an MMLP at Sindhi (Maharashtra) was signed last year by Jawaharlal Nehru Port Trust (JNPT) and National Highways Logistics Management Ltd (NHLML), Sh. Nitin Gadkari stated that 4 MMLPs were being planned in Maharashtra, most likely at Jalna, Nasik, Solapur, and Sangli. 

Logistics

Such an investment will surely yield success in the long run

The Madhya Pradesh government also announced earlier this month that it has started the process of acquiring some 250 hectares of land in Pithampur with the intention of creating a fully integrated “green” MMLP, which would be constructed by the Madhya Pradesh Industrial Development Corporation (MPIDC). The investment bids for the MMLPs that are being considered for Bengaluru and Nagpur will also shortly close. The Bengaluru MMLP will be approved in September and will require a commitment of INR 935.90 crore from the confidential region. The private sector must contribute INR 599.39 crore to the MMLP in Nagpur, which is anticipated to be awarded in October. With additional MMLPs going live, investment activity in the logistics industry is set to pick up speed.

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