NHAI sets up a logistics subsidiary, shifts 9 SPVs to new entity

The Centre is of the view that having a dedicated entity for cargo movement between ports and roads will lead to revenue and fuel savings
To streamline its logistics business, the National Highways Authority of India (NHAI) has constituted a subsidiary for logistics movement across the country, transferring the existing nine contracts to the arm. Future logistics projects would also be allotted to this subsidiary.

NHAI has rechristened Cochin Port Road Private Ltd as National Highways Logistics Management Company to oversee multimodal logistics parks and port connectivity projects.

“We don’t have individual SPVs (special purpose vehicles) for each port connectivity project. They now come under the umbrella company National Highways Logistics Management Company,” an executive said.

The proposal to make the firm a holding company for all logistics SPVs was mooted in November 2020. All the previous SPVs have been merged into this subsidiary and also the new ones will be formed by the entity.

The Centre is of the view that having a dedicated entity for cargo movement between ports and roads will lead to revenue and fuel savings. 

It will also provide enhanced connectivity for goods movement.

The idea behind creating a single entity for port-led development is to enhance port-road connectivity for seamless logistics movement and improving first-mile’ connectivity. “We often say last-mile connectivity (for link between land and port), but it is essentially the first mile because if that part is not covered it will hamper the overall supply chain,” the executive added.

The roads will be built in such a manner that they won’t impact city traffic despite all-day truck movement. This, in turn, will reduce turnaround time for the transporters and improve their revenue.

The ministry of road transport and highways plans to develop multi-modal logistics parks under its logistics efficiency enhancement programme (LEEP) in 15 locations all over India at a cost of Rs 33,000 crore.

In 2016, the ministry had said it will take up 82 road projects, along with the NHAI, under the Bharatmala scheme, to improve port connectivity.

The projects are part of the broader highway expansion plans for connecting economic hubs to major and minor ports, via road and rail.

Under the Bharatmala project, the ministry will review the national highway network to improve connectivity to coastal and border areas as well as religious and tourist places.

Around 1,500 major bridges and 200 rail bridges are part of this, as is connectivity to district headquarters and the Char Dham (Kedarnath, Badrinath, Yamunotri & Gangotri).

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel