New Delhi The Center has extended the concession period for its ambitious Multi-Modal Logistics Park (MMLP) scheme from 30 to 45 years, a top official of the agency implementing the project said, a change that will help more long-term investors. Looking for a share can draw India’s infrastructure story. The government plans to create 35 such mega freight-and-transport hubs under its flagship Bharatmala scheme, which aims to facilitate freight movement, improve efficiency and reduce logistics cost.
National Highway Logistics Management Limited (NHLML) Chief Executive Officer Prakash Gaur said the extended concession period, one of the longest in the infrastructure sector, will help investors to recoup their investments and generate surplus, said by the National Highways Authority of India. A special purpose vehicle installed. of India.
The Union Road Ministry has mandated NHLML to execute the MMLP and implement connectivity including port links.
“The MMLP is to be developed in phases with each phase (about three) of five years duration. This would have given investors only about 15 years to recover their investments and generate surplus. With each MMLP more is expected to be required 1,000 crore investment, a long grace period of 45 years will give the necessary impetus to the scheme,” Gaur said in an interview.
The MMLP spread over at least 100 acres will be set up as a public-private partnership with a total capital investment of 50,000 crores. These parks aim to transform the existing point-to-point logistics model into a hub-and-spoke model. Here freight from different locations will arrive at one hub, where it will be warehoused before being sent to another hub, after which it will move to other smaller locations. The multi-modal logistics parks will allow seamless freight aggregation, warehousing and distribution, and provide value-added services such as customs clearance and IT services.
This is expected to bring down India’s high logistics cost by about 13-14% of GDP to single-digit levels, as is the case in most advanced economies.
Gaur said the government may bid for at least four multi-modal logistics parks this year under the new concession period. This includes the Chennai MMLP, which is likely to go up for bidding in July, and Nagpur, Bengaluru and Indore in August.
Gaur said detailed project reports for a dozen other multi-modal logistics parks are in various stages of finalization, and once they are available, more bids may be invited this year or early next year. .
However, at the end of 45 years, this facility will be returned to the government. Under the earlier 30-year plan, the operator had a right of first refusal for an extension of 30 years.
Road Transport Minister Nitin Gadkari had laid the foundation stone of India’s first MMLP at Jogighopa, Assam in October last year.
“Each MMLP will require investment of more” 1,000 crores, and in this context, the longer concession period will certainly increase the interest of investors in these important infrastructure projects. But over the period of operation, the location of these facilities will be the key to bringing investment. Multi-modal logistics parks close to ports or airports will provide an opportunity to develop right infrastructure for transportation and trade of goods with single window facility for export and import,” said Arindam Guha, partner and leader, government and public services , said Deloitte India.
Apart from the longer concession period, the government has taken several other measures to make multi-modal logistics parks attractive to investors, including changing the bidding parameters and linking it to the minimum guaranteed revenue share and easier exit clauses for the original investors. . Bringing joint venture partners in various phases of the project.
Gaur said the multi-modal logistics parks are attracting good investors and the results will be visible when the projects are awarded later this year.
Anil G Verma, Executive Director and Chairman, Godrej & Boyce said, “The focus on the logistics sector through the PM Gati Shakti Yojana will give a boost to the economy.”
“Logistics cost in India is among the highest in the world. Building infrastructure is the best way to bring down the cost and bring competitiveness in the economy to serve both the domestic market and exports. Initiatives to promote investment from the private sector by leading through Government investment of 7.5 trillion is laudable,” Verma said.