Multi modality in India

Transportation in India is changing, albeit at a slow pace. The golden quadrilateral project started in late 90s took painfully long twelve years to complete (it was formally declared complete in January this year). The initial deadline for completion was 2003. The other ambitious project the North South East West corridor will take some more time to complete. Though the Golden Quadrilateral took almost eight extra years to complete, the project capacity might have already saturated. The corridor is four lanes with a few exceptions. The North South East West corridor too has just four lanes on most stretches. The dedicated freight corridor (DFC) is yet to see full scale construction work on both eastern and western stretches. However, with the financing of first phase of the project from Rewari to Vadodra in place (Japan International Cooperation Agency has signed an agreement to provide approximately 93 billion Japanese Yen (Rs 5,625 crore/ $ 1.1 billion) for consulting and construction); the project looks to be on the fast track.

The three projects mentioned above are the largest infrastructure projects of India in recent history. These projects once completed are expected to decongest India’s chocked highways and move freight quickly on trains. This will be a significant boost to the overall GDP and will create hundreds of thousands of jobs across the country. The DFC proposes to set up logistic centres along its eastern and western arms to help move cargo efficiently and to bring development in hitherto underdeveloped areas (mainly in Rajasthan and Uttar Pradesh). An efficient logistic system in India would mean reducing artificial inflation due to supply side constraints, better prices for both small and large scale industries and better inventory management. What is missing from the development ladder is an important yet underestimated concept, multimodality.

Off the beaten path

Multimodality has been in works for decades in Europe. The arrival of a single market and the Euro has further strengthened the concept. Europe today utilizes its sea ports, inland water ways, rail network, road network and the airports seamlessly. Inland water transport in Western Europe increased from 568,766 containers per year in 1987 to 3.2 million containers per year in 2001. Airports in Europe are increasingly getting connected to the European road and rail networks. All major airports in Europe are connected by a high speed rail link to the city. Amsterdam, Frankfurt, Milan (Malpensa), Munich, Oslo, Paris (Charles de Gaulle) and Vienna all have at least a high speed rail link from the airport to the city centre. Out of these airports, Amsterdam, Frankfurt, Paris and Milan have high speed train connections to cities in neighbouring countries. A high speed train might be a competition on short haul flights but it also increases the catchment area (surrounding area from where passengers originate) of the airport significantly.

Lufthansa has benefited immensely from the high speed rail (Inter City Express or ICE) connection at Frankfurt airport. It has stopped many short haul flights like that to Cologne and now offers train connections from Frankfurt. Convenient location of the train station (a few meters from arrivals area) makes it easy for the passenger to seamlessly shift from flight to train. A dedicated daily freight train service has been introduced between Frankfurt and Leipzig (a city in east of Germany). The connection links the East European distribution hub of DHL to Frankfurt. This is an ideal example of multimodality at its best.

There but invisible to many

Indian airports have started their very own small experiment with multimodality. Delhi airport’s new terminal has a high speed rail link to the city centre. Mumbai, Bangalore and Hyderabad too will have a rail connection in near future. However, there is a huge potential which is largely being ignored by all the major airports. Delhi, Bangalore, Hyderabad and the proposed Navi Mumbai airport all are situated next to an existing rail line. None of the airports use them. If these rail lines next to the airport are put to use they can open up a completely new avenue for the airports.

Connecting to the national railway system will throw open the airport to connectivity to a large hinterland. Out of all the airports mentioned above, Delhi and Navi Mumbai stand to benefit the most from such a link. Delhi is the national capital and has large manufacturing hubs in the vicinity. Delhi also has a large domestic consumer market for high end products like electronics, mobile devices (increasingly smart phones) and fashion. All these are extremely time critical since they become obsolete in a matter of weeks. The ideal location of Delhi also favours it be become a regional distribution hub for such time critical goods.

Ideally Delhi airport should push for a rail siding at the airport’s north western corner and develop it as an air-rail centre. It will directly connect the airport to cities like Jaipur in the south west and Chandigarh, Ambala, Jalandhar in the north. This will increase the catchment area for the airport and more passengers will take the rail link to the airport. It will similarly benefit arriving passenger who can take the train to their destinations. Tourists arriving at the airport can directly connect to Jaipur or Agra. The maximum benefit however will be to the cargo business of the airport. Seamless transfer of cargo from road and rail to air and vice-versa will increase the efficiency of the airport manifolds. The future DFC will also link the inland container depot (ICD) at Tuglakabad. This will present another opportunity for Delhi airport to add more business. With a little innovative thinking Delhi airport can become a mighty logistic node for the northern Indian region.

A four point approach

1.      Identify the potential customers (Samsung, Sony, HP, Dell, etc)

2.      Approach the customers directly to set up distribution base at Delhi

3.      Get professional integrators to the airport (DHL, TNT, FedEx, Blue Dart, etc)

4.      Provide infrastructure in cooperation with existing cargo operators

5.      Ensure internationally accepted service standards

Committing to internationally accepted service standards might be little too ambitious because state run agencies like customs still belong to the old school and lot of work is done on paper. A different approach where technology is deployed to minimise human interface together with an incentive based on turnaround time might motivate the department to get more customer friendly.

A similar case can be worked out for the proposed Navi Mumbai airport. The site is close to Jawaharlal Nehru Port Trust (JNPT), one of the largest ports in India. A rail track connecting the port to the city of Mumbai and rest of India runs close to the south eastern periphery of the proposed airport. While there is potential for the passengers to interchange from flights to train and to connect to the hinterland, the potential of the site becoming a major logistic centre for Western and Southern India is much higher. Once completed the DFC will have its terminal node at JNPT, a special economic zone next to the proposed airport will provide opportunities for the people and goods from the zone to be transported quickly around the region.

The government of India is planning to replace various state and central taxes with a uniform Goods and Service Tax (GST). The GST when introduced will change the way business is done in India, especially manufacturing and retail. The current tax advantage and disadvantage of having distribution centres in different parts of the country will disappear with GST. Companies will be able to identify strategic sites for their distribution centres and will manage large supply chain systems with greater efficiency. Multimodal transport nodes can leverage this opportunity by offering integrated facilities. The Indian market is growing fast and will continue to do so in the few decades to come. Indian airports have a unique opportunity to develop the nascent market by identifying an anchor tenant (large integrators like DHL, FedEx, TNT, Blue Dart, etc) and help create distribution networks.