Multimodal logistics park: Re-defining infrastructure in India

By Kriti Rathi

The Roadways Ministry has come up with an ambitious project for the development of a multimodal logistics park (MMLP) in Jogighopa, Assam. It plans to incorporate rail, road, water, and air connectivity.

With this project, the rustic town of Jogighopa, situated on the banks of Brahmaputra, would soon become the hub of India’s trade with South-East Asia and within the North-East region. Its unique location, along National Waterway 2 and on the Indo-Bangladesh road route, makes it an ideal candidate for the MMLP.

Implementation and effects

The project, a brainchild of Minister Nitin Gadkari, will be implemented in two phases, with phase I totalling about ?155 crore and phase II around ?115 crore. It is being backed by Asian Development Bank (ADB), which focuses on infrastructure development in Asia. The development includes railway sidings, container terminals, warehousing, non-cargo processing, a truck terminal, common facilities, support infrastructure, and equipment.

The project also demonstrates the Road Ministry’s improved focus on the logistics sector, which was recently awarded ‘infrastructure status’ by the government, with already having shortlisted 35 MMLPs across India of which four are being executed in association with ADB. The Logistic Performance Index published by the World Bank shows India jumping 19 spots in the global ranking from 54 in 2014 to 35 in 2016.

Seeking inspiration

“Recent developments, like the announcement of the Northeast Economic Corridor under the Bharatmala programme of the road ministry and the signing of the MoU (memorandum of understanding) between India and Bangladesh for developing the Dalu-Tura-Goalpara-Gelephu multimodal trade route strengthen Jogighopa’s case for MMLP,” a senior government official said on condition of anonymity.

The recent travel corridors from mainland India to the North-East region pass through an area known as the “Chicken’s Neck”—a narrow strip of terrain in India between the borders with Bangladesh, Nepal, and Bhutan. Since it is close to these borders and cannot be expanded, the North-East region requires an alternative route for providing connectivity to the rest of India—one which has plenty of extension potential. One such option is the Indo-Bangladesh road route, along with the National Waterway 2.

Drawing synergies from freight movement

The move comes at a time when India’s neighbours are preparing for trade. For example, Bangladesh’s development of the Khulna-Dhaka-Sylhet Economic Corridor and the Banglabandha-Dhaka-Chittagong-Cox’s Bazar Economic Corridor are aimed to promote industrial development in the region. These initiatives are expected to drive freight movement in the region and facilitate trade between India and Bangladesh, and between Bangladesh and Bhutan through India.

According to the draft report on the Jogighopa MMLP, freight demand in terms of volume is projected to grow at a compound annual growth rate (CAGR) of 5.93% from 11.96 million metric tonnes (MMT) in FY17 to 33.74 MMT in FY35. The total container market is projected to grow from 4,808 TEUs (twenty-foot equivalent units) in FY17 to 7,925 TEUs in FY35—a CAGR of 2.82%.

Role of politics

The decision is essential because of the constant “Act East” policy of the National Democratic Alliance (NDA), along with the expansion note of the ruling Bharatiya Janata Party which has managed to form governments along with alliance partners in Assam, Arunachal Pradesh, Manipur, and Sikkim. The party is hoping to play an influential role in the upcoming assembly elections in Tripura and Meghalaya. The BJP is also making inroads in Tripura which has been led by Left Front governments for the last 25 years. The party is contesting assembly elections, scheduled to be held on 18^th February, as the straight challenger to the Left Front in the state. The political importance of the North-East cannot be ignored because the eight states together have 25 Lok Sabha seats.

Chander Agarwal, managing director of logistics company TCI Express, welcomed the government’s decision saying, “North-East is one of the regions which have played a pivotal role in terms of logistics connectivity with the international and national corridors of India. We believe ASEAN’s (Association of Southeast Asian Nations) strong bond with the North-East region will act as a mascot for the entire region and for the rest of the businesses in India.”

Featured Image Source: Visual Hunt