The logistics industry is witnessing a quantum growth as a consequence of the sustained and robust growth in manufacturing and services sector, both domestic and EXIM trade, liberalized market and increasing levels of disposable income.

Initiatives

Government of India has introduced Foreign Direct Investment (FDI) in the manufacturing and retail sector. With a larger number of foreign investors entering the Indian market, better logistics practices are expected in the coming years. As India's retail sector opens up on a huge scale, domestic logistics companies are planning significant investments to expand their portfolio of services. It is expected that in the next two years, the logistics sector will have undergone major changes, offering a wide spectrum of value added services such as labeling, packing, kitting, reverse logistics etc.

IL&FS IDC Initiative in this sector

IL&FS IDC has ventured into the following areas:

• Airport modernization / upgradation
• Agro warehousing
• Free Trade Warehousing Zone
• Road and rail connected inter-modal Logistic Park
• Air cargo related warehouses, cargo centers for high end exports / imports
• PPP mode with railways and their affiliates such as CONCOR for Inland Container Depots (ICD) and rail-side mega-warehousing complexes
• Retail logistics for ITC
• Land Custom Stations (LCS)
• Inland waterways and Logistics solutions

Project Development Approach

IL&FS IDC plays multiple roles with multiple agencies for developing logistics infrastructure projects. In partnership with the State Governments and government agencies, it creates replicable commercial prototypes across the entire State. As a Project Developer, it creates appropriate project structures, achieves technical / financial closure for the projects and finally, works on bringing in operators to maintain facilities over the project life.

Ongoing Projects

• FTWZ with public and private sector partners
• Inland Container Depot at Loni, Ghaziabad, UP
• BTC - Transport centre
• Integrated Logistics Solutions on National Waterways 1
• Transport hub at Pant Nagar, Uttarakhand
• Integrated industrial park at Kolkata, West Bengal
• Transport hub at Hardwar, Uttarakhand
• Raipur logistics hub
• Rail based logistics park
• Air cargo complex with MSIL

Free Trade Warehousing Zones

Background

The primary objective of the Free Trade Warehousing Zones (FTWZ) is to create trade-related infrastructure to facilitate the import and export of goods and ser vices with the freedom to carry out trade transactions in free currency.

Initiatives

The Government of India introduced the concept of FTWZ as part of the SEZ Act 2005 and the SEZ Rules 2006 to promote infrastructure development in this sector.

IL&FS IDC initiatives in the sector

IL&FS IDC has partnered along with MMTC Ltd to pioneer the development of the FTWZ at Greater Noida, Uttar Pradesh. Under a Special Purpose Vehicle (SPV) structure, a global major, is partnering to undertake implementation and operation of the Greater Noida FTWZ. The other locations include Kandla in Gujarat, Haldia in West Bengal, Mumbai in Maharashtra, Ennore in Tamil Nadu and Cochin in Kerala.

Project development approach

Each of these projects vary in terms of sizing, project cost and expected trade throughout the region. IL&FS IDC is taking the Project Development Risk and co-financing the effort for the pioneering project. The parties in joint venture contribute equally depending upon the fund requirement. Each project is followed through right from start to finish.

Land Custom Stations

Background

The Government of India intends to, on a PPP basis, upgrade the Land Customs Stations (LCS) or Check Posts between India and its neighbours to facilitate the smooth movement of goods and passengers across the border. IL&FS IDC has been mandated to suggest possibilities of developing the same on an appropriate PPP format.

IL&FS IDC initiatives in the sector

IL&FS IDC provides complete process management in the sector including technical studies, risk profiling of the project, evaluating different PPP options, financial modeling exercises and bid process management.

Ongoing Projects

• Integrated Check Post at Wagah, Punjab
• Two Integrated Check Posts in Tripura
• Petropole, West Bengal