The logistics parks planned by the railways have the potential to garner business for its ambitious dedicated freight corridor project, besides being large revenue streams in their own right. These parks will be constructed along two arms of the freight corridor?one running from Tughlakabad to Mumbai and another from Ludhiana to Howrah.

Loosely planned along the lines of the Chinese model, each of these parks are expected to be built on about 600 hectare of land and will include a multi-modal transport system, along with warehousing, packing and cold storage facilities and business centres. The railways hopes to provide a complete back-end logistics solution through these parks.

Most importantly, they would provide connectivity to industries through the freight corridor and would ensure that containers can be brought from the coasts and transported easily and efficiently. It would also mean that the freight corridor gets enough business through existing industries even as it encourages the setting up of more industries near the logistics parks to secure its future, a Rail Bhavan official pointed out.

The railways also hopes that the logistics parks will help private container train operators, many of who are still looking for infrastructure support such as depots and warehouses. These operators can use the infrastructure available at these parks on payment of a user fee. The ministry is confident that the parks will help make freight more competitive and lower the unit cost of rail transportation.

Along with rail connectivity, there are also plans to construct road links, and railway ministry officials said there are also proposals to build air links for faster cargo transportation. The railways is looking to set up these parks at a distance of 400 km on the freight corridor. Given the fact that both the corridors would together be of about 3,000 km in length, the ministry has decided to initially set up eight such parks. However, the number may go up to 20 if states show enough interest.

While the exact location of the parks are still to be worked out, states such as West Bengal and Punjab have already evinced interest. The railway ministry and these states are already in talks to finalise the location. The parks may also be built within or along special economic zones or proposed manufacturing investment zones, if states wish. Each of the parks is estimated to cost about Rs 500 crore. In the long term, if 20 such parks are built, the railways will require an investment of about Rs 10,000 crore.

With such large investments, the railways is at present exploring the public-private partnership (PPP) route. It would provide surplus land to developers to build the parks and expect most of the other investment from private players. States would provide support through funding as well as shortlisting the best location for the parks and may also provide land.

While there’s still no clear-cut timeline for the parks, the railway ministry is hoping to construct at least one of these logistics parks by next year. It will serve as a model project and the rest of the parks will be fashioned along its lines. The ministry has been planning to develop its surplus land and the decision to set up logistics parks is part of this plan.

Railway minister Laloo Prasad in this year’s Railway Budget highlighted the decision to construct multi-modal logistics parks through the PPP route.