Ministry of Shipping approves Rs 156 crore Freight Village in Varanasi

Dec 8, 2018 09:34 IST
Ministry of Shipping approves Rs 156 crore Freight Village in Varanasi

The Ministry of Shipping December 6, 2018 approved the development of Rs 156 crore Freight Village in Varanasi, adjoining the Inland Waterways Terminal on River Ganga.

The Varanasi Freight Village will be developed by the Inland Waterways Authority of India.

What is a Freight Village?

A Freight Village is a designated area where facilities for various modes of transportation, distribution of goods and other logistics are available in a synchronised manner on a large scale.

Freight villages are cargo aggregators which offer various logistic choices to a shipper or cargo owner such as choice of rail-road; rail-waterway; road-waterway.

Function

The main function of freight villages is management and utilisation of various modes of transport, synergising them and decongesting the existing mode of transportation.

The delivery and coordination of various freight related activities under one roof ensures ease of doing business and makes it possible to realise high truck capacity.

Varanasi Freight Village

The Varanasi freight village will be developed over a land area of about 100 acres, which will be acquired in two phases - 70 acres in first phase and 30 acres in second phase at a total estimated cost of Rs 120 crores.

Another pre-investment cost of Rs 45 crores is expected to be incurred on procurement of consultancy service and operation of project management unit.

The Inland Waterways Authority of India will own the land of the freight village, but part of it will be leased to logistics companies and waterways related manufacturing and trading companies to set up their own business.

The freight village can potentially cater to a diverse cargo profile including containers, bulk and break-bulk cargo, liquid bulk and bagged cargo.

It will serve as a cargo hub, and a centre for aggregation and value addition.  

It will also provide support to stimulate development of a professional logistics industry in Varanasi.

Why Varanasi was chosen as a site for freight village?

  • A pre-feasibility study by the World Bank discovered Varanasi as a suitable site for the freight village.
  • The city is located strategically and is a focal point in the logistics chain of Eastern Transport Corridor of India where the National Waterways-1, Eastern Dedicated Freight Corridor (EDFC), National Highway-7 and National Highway-2 pass through.
  • The volume of traffic on inland waterway to Varanasi is expected to increase with the commissioning of the Inland Waterways Terminal (IWT) being built under the Jal Marg Vikas project.
  • The estimated volume of traffic for Varanasi multi modal terminal is 3.55 MMT by 2020; 3.82 MMT by 2025; 10.12 MMT by 2035.
  • Vessels with capacity of up to 2000 DWT would be able to berth at the IWT multi modal terminal that will have the infrastructure facilities required to handle this expected increase in the volume of cargo traffic.

Is this article important for exams ? Yes

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