Varanasi's game-changing freight village up, extends gateway to Bangladesh

New Delhi: The country’s first freight village in Varanasi, which is Prime Minister Narendra Modi’s parliamentary constituency, is a one-of-its-kind concept that can prove to be a game changer not just in multi-modal transportation but also in the logistics and warehousing segment of the value chain.

Freight village is a specialised industrial estate to attract companies in need of logistics services and can cluster to improve their competitiveness.

The concept will also bring together retailers, warehouse operators and logistics service providers supplying the regional FMCG market.

“It is modelled on concepts that are prevalent in Europe. The World Bank will fund the project,” a shipping ministry official said.

The Inland Waterways Authority of India (IWAI) has been assigned the task of executing this project, the pilot of which will be in Varanasi and after that more villages will connect freight corridors in the country.

“A feasibility study was conducted by the IWAI, and it showed that something like this can be done in India. It was decided that it would be executed at the last minute at one of the stock-taking meetings of the shipping ministry and the IWAI,” another official said.

A project of this magnitude would take at least two years to fructify, an expert said. It will be done in collaboration with the UP government.

“The role of the state government lies in giving electricity and land to begin with.

We will provide all the support needed for the freight village concept,” a UP government official told Business Standard.

This concept is also in line with the government’s thrust on multi-modal transportation connectivity for seamless trade. Multi-modal transportation is the way cargo is shipped from factory to customer.

For example, the first mile in multi-modal transport begins when cargo leaves the warehouse in a truck.

After moving on a designated route, the truck reaches railway sidings, where the goods are unloaded and shifted to a railroad car.

Goods can be alternatively delivered through cargo planes and line haul trucks. After reaching the destination, the last-mile delivery of goods is done through smaller commercial vehicles. For export-import cargo, goods are moved by sea.

With inland waterway and coastal shipping underway, goods meant for domestic consumption are also moved through smaller ships in rivers and coastal waters.

The country’s first multi-modal terminal at Varanasi, at an investment of Rs 1.7 billion, is likely to emerge as a major logistics gateway connecting North India with eastern and north-eastern states, extending up to Bangladesh.

The ongoing construction of the Varanasi terminal, which will have waterways, rail and road connectivity, is part of the government's Rs 53.69 billion Jal Marg Vikas Project (JMVP). However, the freight village is an independent concept and is not part of the JMVP.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.