TN Govt to give incentives for logistics projects worth more than Rs 500 Cr

CHENNAI : In a bid to promote logistics sector in a big way, the Tamil Nadu Government will facilitate projects with more than Rs 500 crore with customised incentives.

To attract and enable financing for large scale logistics infrastructure development, the government will coordinate with financial institution such as National Investment & Infrastructure Fund (NIIF), Tamil Nadu Infrastructure Fund (TNIF) or any other suitable sources for leveraging funds.

According to the latest logistic policy, the government will encourage phase wise preparation of logistics master plan for major cities and metropolitan regions in the state to promote city logistics. It will identify and earmark land parcels, minimum 50 acres, at strategic locations in the state for development of multi-modal logistics parks, warehousing clusters and private freight terminals (PFT) which will be developed through private participation.

The government, through housing and urban development department, will reclassify the warehouse segment to industries category to facilitate ease of doing business in the state. It will also mandate existing warehouse developers to update their developments for streamlining registration process under the new sub-category under industries category within a defined period of time.

Sources in the government said that availability of high-quality logistics services at competitive prices is one of the key levers for enhancing competitiveness of businesses. It enables access to various markets at competitive prices and contributes to vibrancy of the manufacturing and other export industries.

The freight transportation services sector in Tamil Nadu is heavily dominated by road transport. For instance, export-import cargo movement via rail to/from ports in the state on a large number of corridors has a share of only 10%. Further, the rail traffic movements in the state are largely confined to within state or nearby states, with long lead inter-state rail movements dominated by road transport. Also, coastal shipping services and domestic container rail services are limited and confined to only a few routes.

To address these problems, the government will, in coordination with the ministry of railways or its agencies and through private participation, on pilot basis – encourage commencement of container rail services and kisan rail services on strategic routes under market development approach. It will assess and identify strategic coastal shipping routes to encourage and promote inter-modal transport that will result in cost effective services.

In order to strengthen cold chain infrastructure and expand the market for perishable commodities produced in the state, the government will encourage availability of reefer vehicle fleet by providing fiscal support to logistics or trucking companies on registration charges for the purchase/retrofit of reefer trucks. It will promote mechanisation and automation of warehousing sector in the state to improve the handling capacity, efficiency and quality of services.