Nagpur appears set to become the country’s first multimodal air cargo or express delivery services (EDS) hub. The new Nagpur airport project is expected to be completed by 2010 and targets to serve 14 million passengers and handle 0.87 million tonnes of cargo.

The decision to build the multimodal cargo airport in Nagpur was taken four years ago. For, the absence of a cargo airport was coming in the way of realising the full potential of cargo traffic growth in India. However, the Planning Commission’s recent study of the integrated logistics sector pointed out that Delhi was better suited to be developed as a hub than Nagpur. This put a question mark on this Rs. 3-billion project of the Maharashtra government and the Maharashtra Airport Development Company Ltd. (MADC). But the study findings cut no ice with the government.

According to plans, the Nagpur airport will have a captive power plant and a road terminal on 60 hectares with parking space for 1,000 trucks. There are likely to be 14 godowns in addition to the space dedicated to private players for developing their own warehousing facilities. The airport is centrally located and well connected by road, air and rail. India Post has shifted its hub to Nagpur, while some Indian freight forwarders have already established their presence in the city.

A recent survey by the Indian Council for Research on International Economic Relations (ICRIER), along with the Indian Institute of Management, Calcutta, of 133 express companies, 90 clients and 25 freight forwarders was aimed at understanding the feasibility of Nagpur as an EDS hub. The survey found that the EDS industry prefers operating on a “hub and spokes” model. Asked what determined the choice of hubs, express companies pointed out that volume of traffic was the most important factor.

While the Civil Aviation Ministry is trying to develop Nagpur as a hub, the proposed new Act, Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2009, is restricting trans-shipment. In a bid to make Nagpur more attractive as a hub, the Ministry has proposed a five-year exemption from all airport and navigation charges for both domestic and international airlines.