Railways’ Policy on Automobile hub formulated

In a significant policy initiative to facilitate bulk movement of traffic by rail in automobile sector and to increase Railways’ share in automobile transportation, the Ministry of Railways has formulated policy on development of automobile and ancillary hub. This policy has become effective from 16th June 2010. Under this policy, any registered company in India i.e. manufacture of automobile or logistics company or Society for Indian Automobile Manufacturer (SIAM) or registered freight train operator having annual turnover of Rs. 20 crore during last financial year, can apply. Railway land will be provided for such hubs on license basis initially for a period of 7 years. The license fee shall be payable as per extant policy. Automobile and ancillary hubs shall be a common user facility for general use of the automobile industry, without any exclusive right.

The policy formulation comes in the wake of the announcement made by the Minister of Railways Mamata Banerjee in the Railways Budget 2010-11, wherein she has stated that there was a need of the hour to develop new business models and invite domestic investment through PPP mode in areas like new lines to world class stations, auto hubs to ancillary industries, manufacturing units of rolling stock to multi–modal logistic parks, high speed train corridors to port connectivity and multi-level parking to mine connectivity etc. Earlier the Ministry of Railways has finalized a policy on Private Freight Terminal (PFT) with the participation of the private sector and also finalized a policy on Special Freight Train Operator Scheme (SFTO) to provide an opportunity to private investors to use advantages of rail transport to market train services to end users.

The objective of the policy on development of automobile and ancillary hub is to increase the modal share of Railways in transportation of automobiles, which is one of the fastest growing industries in India. With the induction of high capacity auto carriers, having higher throughput as planned by the Indian Railways and as proposed under Automobile Freight Train Operator (AFTO), more number of rakes will be inducted with competitive freight structure. This will increase Indian Railways’ modal share in automobiles traffic, warranting development of more automobile and ancillary hubs to facilitate end to end logistics.

Development of automobile and ancillary hubs will provide an opportunity to automobile manufacturers to carry their traffic by rail in bulk and do secondary distribution to consuming centers in the immediate catchments areas from such hubs. Similarly they can also do aggregation of automobile at such hubs so as to offer full rake load to railways. This will improve rail co-efficient of the commodity.

The policy document also include eligible criteria, license fee and other relevant details which can be seen at Ministry of Railways’ website http://www.indianrailways.gov.in

http://www.pib.nic.in/release/release.asp?relid=62746&kwd=