Delhi-Mumbai Industrial Corridor hub at Nangal Choudhary development work likely to start by end 2018

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New Delhi | Published: September 7, 2017 5:22:13 AM

The development of a logistics hub at Nangal Choudhary in Haryana along the Delhi-Mumbai Industrial Corridor (DMIC) will likely start towards the end of 2018 but major players like DP World, Merc Logistics and Future Group are already vying for a slice of the project.

Delhi-Mumbai Industrial Corridor, MaharashtraThe project was one of the important measures announced by the government.

The development of a logistics hub at Nangal Choudhary in Haryana along the Delhi-Mumbai Industrial Corridor (DMIC) will likely start towards the end of 2018 but major players like DP World, Merc Logistics and Future Group are already vying for a slice of the project.

Sources told FE that these three companies are exploring opportunities to be partners in the logistics hub project and have held meetings with the authorities concerned. The hub will be set up over an area of 1,100 acres to provide “end-to-end logistics facilities”. The project would cost the governments (both the central and the Haryana governments) Rs 3,500 crore, which includes costs of land and basic infrastructure, said the sources.

The engineering, procurement and construction (EPC) contracts will be awarded in October-November for building basic trunk infrastructure. Once the trunk infrastructure is in place (over a year from now), these logistics companies — if selected — can start developing the projects on a public-private partnership (PPP) mode. But interest shown by them at such an early stage, even when trunk infrastructure isn’t in place, reinforces DMIC’s growing importance, said a source.

DP World alone boasts of a portfolio of 78 operating marine and inland terminals supported by over 50 related businesses in 40 countries.

Even the Dedicated Freight Corridor Corporation of India (DFCCIL), a special purpose vehicle (SPV) under the ministry of railways, has expressed willingness to be a partner in the logistics hub project, added the source.

Usually, Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC) joins hands with entities of the relevant state governments to form special purpose vehicles (SPVs), which are the anchors of projects in their respective areas. For this project, DMICDC has tied up with Haryana State Industrial Development Corporation (HSIDC).

Already, 400-500 acres of land has been acquired by HSIDC for the logistics hub, and the rest of the 1,100 acres required for the project is expected to be acquired soon.

According to the model developed by DMICDC, while states offer land, the funds released by the Centre usually go towards its development. Once the land is developed, it will be allotted to willing investors at a price and with those funds, DMICDC will acquire another chunk of land and start developing it. In case of the logistics hub, a similar model is followed.

When contacted, DMICDC chief executive Alkesh Kumar Sharma said: “The logistics project will be developed on a PPP mode, where the SPV will create trunk infrastructure and then the private players will come to develop the facility.”  The logistics hub will have an inland container depot, custom-bonded warehouses, cold-chain facilities, basic product processing facilities, packaging, ICT-enabled labelling etc, he added.

The catchment area of the logistics hub will cover Neemrana, Khuskhera, Bhiwadi and Bawal, among others. From there, the material will come for despatch to ports in Mumbai along the DMIC.

With an envisaged investment of $90-100 billion by 2040, the 1504-km DMIC across six states was intended to be developed as a ‘global manufacturing and trading hub’. The Centre has committed $4.5 billion for the first phase of the DMIC projects, including the logistics hub. DMIC is touted as the world’s single-largest infrastructure project.

The project was one of the important measures announced by the government to help drive the share of manufacturing in the country’s GDP to 25% by 2022, from roughly 16% now.

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