RIL’s Multi-modal Initiative: Chennai

Modern logistics services for internal and international traffic, notably for south India, would be provided by the strategically placed MMLP.

Reliance Industries has been given the contract to build India’s first multi-modal logistics park (MMLP), according to a statement from the Ministry of Road Transport & Highways on Friday (RIL).

The Prime Minister lay the cornerstone for the first MMLP granted to RIL, Chennai at Mappedu, on May 26, 2022. “Pioneering the pace of creating a national state-of-the-art multi-modal infrastructure, MoRTH has achieved tremendous progress under the NMP,” the Road Ministry stated in a release.

The 1,424 crore project would provide effective, affordable, and value-added logistics services such cargo aggregation and disaggregation, distribution, inter-modal transfer, sorting, packaging, and repacking, among others.

For the Chennai MMLP, the National Highways Logistics Management (NHLM) has received three proposals, including one from Adani Group. Technically speaking, two bidders were eligible for the financial bid opening. The Design, Build, Finance, Operate, and Transfer (DBFOT) model is the basis for the model concession agreement for MMLPs.

Mappedu MMLP

The MMLP will serve as a logistical hub for the southern area and is conveniently situated 52 km from the Chennai Port, 80 km from Ennore Port, and 87 km from Kattupalli Airport. Over a 45-year period, it is predicted to accommodate 7.17 million tonnes (mt) of freight.

The Sriperumbudur-Oragadam industrial belt’s automotive and electronics manufacturing clusters are near to the MMLP, which is developing in Thiruvallur district’s Mappedu village. In addition, a top ministry official noted that it is adjacent to the Chennai Peripheral Ring Road (CPPR).

“Chennai is a significant hub for logistics and supply chain in south India. Additionally, it has internal and international connection, which transforms the MMLP for the region.

Warehouses, refrigerated storage, freight terminals, customs facilities, truck terminals, lodging, and boarding facilities will be available at the park. It will enable shippers to select alternative forms of transportation based on their needs,” he added.

The project has been in the works for over a decade, but it has yet to take off owing to a lack of reaction from the business sector on matters such as connection.

A Memorandum of Understanding was signed in October 2021 by the Tamil Nadu Industrial Development Corporation, National Highways Logistics Management Limited, and the Chennai Port Trust.

Due to its proximity to the Chennai Peripheral Ring Road, the project would connect the Chennai airport as well as the ports of Chennai, Kamarajar, and Kattupalli.

According to a pre-feasibility assessment, the project would also act as a secondary market cluster for Ranipet, Ambur, Tirupur, and Bengaluru, which are home to businesses like as leather, heavy equipment components, autos, cement, sugar, and chemicals. According to industry insiders, train connection from Mappedu to the ports will be critical to the project’s success.

The partnership

The Centre and the Tamil Nadu government have formed a special purpose vehicle (SPV) comprised of National Highways Logistics Management, Rail Vikas Nigam, Chennai Port Authority, and Tamil Nadu Industrial Development Corporation to establish the country’s first MMLP.

“The anticipated project cost is Rs. 1424 crore, with a concession duration of 45 years.” The SPV would offer 5.4 km of 4-lane national highway access at a cost of 104 crore, as well as a new rail siding to the MMLP site of roughly 10.5 km at a cost of 217 crore.

The park will be built in three phases, with a total developer investment of Rs 783 crore. The Phase-1 development is expected to be completed in two years, by 2025, and will lead to commercial operations.

The costing

MMPLs will be critical in lowering logistical costs. The logistics cost in India is quite high as a proportion of GDP, at 16%, while it is roughly 8% in wealthy nations such as the US and Europe. The logistics expenses in China are 10%. The government seeks to reduce logistics costs to 10% of GDP.

The Road Ministry is creating 35 MMLPs under the PM Gati Shakti National Master Plan (NMP), which was released in October 2021, with 15 MMLPs being prioritised in the next three years.