Leading firms eye railways’ $4 bn logistics parks

March 12th, 2009 - 4:31 pm ICT by IANS  

By Anuradha Shukla
New Delhi, March 12 (IANS) Indian Railways’ ambitious $4 billion (Rs.20,000 crore) programme inviting the private sector to build and develop multi-modal logistics parks along the proposed eastern and western dedicated freight corridors has evoked interest from leading players in the field.

State-run Container Corp of India, DHL Logistics, Transport Corp of India, GATI, Adani Logistics, Sical Logistics, World Windows Infrastructure and Mahindra Logistics are some of the companies in the fray, a railways ministry official said.

“So far, based on our invitation for sending us expression of interest, we have received applications from nine companies,” said a senior ministry official involved in the execution of the public-private initiative.

“By the time the deadline ends on March 15, we expect some more companies to respond,” the official told IANS, requesting anonymity. He said each of these logistics hubs would be provided 300-400 acres of land for development.

Currently, two routes have been taken up for the dedicated freight corridors and the logistics parks will come up along them.

These are the 1,483 km western route from the Jawaharlal Nehru Port Trust in Navi Mumbai to Dadri in Uttar Pradesh via Ahmedabad, Palanpur, Rewari and Tughlakabad (Delhi); and the 1,806 km eastern route from Dankuni (near Kolkata) to Ludhiana in Punjab via Sonnagar, Mughalsarai, Allahabad and Khurja.

The basic objective of the logistics projects is to enhance the volume of rail freight in the overall transport chain of the country with complete solutions to help companies reduce both the cost and time of transporting goods.

“Private companies can also develop real estate on such land. They can build offices, commercial complexes, trade pavilions, conference facilities, hotels, restaurants and even residential accommodation,” the ministry official said.

According to a study by a leading global realty consultancy Cushman and Wakefield, the Indian logistics business is expected to grow at 15-20 percent per annum over the next five years, attracting investments of $385 billion. ($1 equals Rs.50 approximately)

The study also said that by 2012, about 110 logistics parks will be operational in the country spread over 3,500 acres, with another 45 million sq ft of warehousing space to be developed by various logistics companies by same time frame.

On being asked if any real estate and infrastructure companies had also shown interest, the railway official said there was little hope of this since such companies were themselves facing a funds crunch.

But he was also candid enough to admit that the slow tendering process had perhaps kept away some companies like engineering and infrastructure major Larsen and Toubro and Delhi-based realty developer DLF.

Both these companies had expressed interest in the modernisation of the New Delhi Railway Station and bid for the tender. But they have been waiting for a final outcome for over a year.

“This is obviously deterring some players. But they must understand our compulsions,” the official explained.

Freight carried by Indian Railways has grown at an average of nine percent per annum over the past five years and the ministry has set an ambitious target of hauling 1.1 billion tonnes of freight by the end of the 11th Plan in 2011-12.

“Multi-modal logistics parks will be the hubs for providing end-to-end solutions for the supply-chain management of industrial customers and shall be well-served by rail and road connectivity,” the official said.

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