Scaling Up India's Freight: Gati Shakti Cargo Terminals Expansion

Scaling Up India's Freight: Gati Shakti Cargo Terminals Expansion

The Indian Railways is undertaking a significant expansion plan to establish an additional 200 Gati Shakti Cargo Terminals (GCTs) across the country. These terminals are pivotal for enhancing freight revenue, easing congestion in rail networks, and facilitating faster movement of passenger trains. The decision to expand follows the successful implementation of the initial 100 GCTs, which were announced in the Union Budget 2022-23.

GCTs are multi-modal terminals designed to handle bulk cargo transported via rail. They are established under a policy that allows the monetization of vacant Railway land through public-private partnerships (PPP). The first phase of 100 GCTs was scheduled to be completed over five years from 2022-23.

Progress of Phase 1:

• 77 out of the initial 100 GCTs have already been commissioned, amounting to a total cost of approximately ₹5,400 crore.
• These terminals are strategically located in states like West Bengal, Jharkhand, Odisha, Telangana, Tamil Nadu, and Uttar Pradesh.
• Major operators at these terminals include Concor, Reliance, Adani, JSW, IOCL, and BPCL, among others.
• The remaining terminals are expected to be operational by the end of the fiscal year 2024-25.

Expansion Plans:

• Encouraged by the success of Phase 1, the Railways intends to tender for an additional 200 GCTs once the first 100 are completed.
• The expansion is estimated to require ₹12,000-14,000 crore in private investment.
• Each terminal is expected to cost an average of ₹65-70 crore, with some ranging from ₹50 crore to higher amounts.

Development Models:

GCTs can be developed through two models:

1. On non-Railway land: Private players identify the location and construct the terminal after obtaining necessary approvals.
2. On Railway land (fully/partially): Railways identifies land parcels, and the operator for construction and operation is selected through open tendering.

Boosting Freight Share & Complementary Initiatives:

• Railways aims to increase its share in India’s freight traffic from the current 29% to 35% by 2030.
• In FY24, Railways carried around 1,600 million tonnes (mt) of the total 5,500 mt cargo moved across the country.
• Major commodities transported include coal (787.6 mt), iron ore (181 mt), cement (154 mt), and other volume-based items like white goods.
• The development of GCTs is expected to lead to faster goods movement and decongestion of tracks for passenger trains.
• Railways also plans to add 5,000 km of new tracks every year for the next 3-5 years to support the increased freight capacity.

About Gati Shakti Cargo Terminals:

• Gati Shakti Cargo Terminals are a key initiative of the Indian Railways to boost its freight business and attract private investment.
• Launched in 2022 as part of the PM Gati Shakti National Master Plan.
• Aim: To develop multimodal logistics facilities and reduce logistics costs.
• Target: 100 terminals to be developed in 5 years (2022-2027).
• Model: Public-Private Partnership (PPP) and private sector investment.
• Location: On railway land or private land near railway facilities.
• Facilities: Warehousing, cold storage, customs clearance, and value-added services.
• Benefits: Reduced handling time, improved efficiency, and increased railway’s modal share in freight transport.

The expansion of Gati Shakti Cargo Terminals is poised to transform India’s logistics landscape and contribute significantly to the country’s economic growth.