 "Private firms to run automobile trains")
Under the policy, the rebate for carrying automobiles on the Indian Railways would be built into the freight rates offered by the Railways. An earlier AFTO scheme, launched in July 2010, had allowed private entities to induct and operate special wagons on the network and offered 15 per cent rebate on freight rates for every rake loaded. In the case of high-capacity wagons, for every increase in throughput of 10 per cent, an additional two per cent rebate on freight rates was provided. But the policy had evoked cold response from industry.
Society of Indian Automobile Manufacturers (Siam) Deputy Director-General Sugato Sen told Business Standard: "The earlier policy was not competitive, with rates offered by road freight transporters more attractive. Now, the rebate has been built into the Railways' freight rate." For a distance of less than 1,500 km, however, roadways would continue to be more competitive as these offer last-mile transportation and help cut 15-20 per cent cost. "We are satisfied with the structure of the new policy and are open to negotiations. We are committed to moving more freight by rail," Sen said.
Though the Railways currently carry around one million vehicles - mainly cars, light commercial vehicles, besides two-wheelers and three-wheelers - on its own trains, the new policy would also allow operation of privately owned trains dedicated to automobiles. This would facilitate transportation of as many as 318 small cars of the size of Maruti's Alto in one go, as against 265 at present.
The railway networks transport a major chunk of automobiles in developed countries. The cost there is 10 per cent cheaper than roadways. For instance, in the US, 70 per cent of automobile transport is done through railways; in Europe, 35 per cent; and in China, 16 per cent. In comparison, in India, only six per cent of the 17.38 million passenger vehicles, two-wheelers and three-wheelers sold last year were transported by trains. In 2009-10, less than one per cent of auto freight was transported via the Railways.
Sen added: "The Railways' contribution to automobile transport is likely to go up to 15 per cent and then to 25 per cent over the next five years after the requisite infrastructure is put in place. This would mean less transportation time as well as freight cost for car manufacturers, especially in the far-flung areas like the Northeast where road connectivity is poor."
In addition, even third-party logistic providers could invest and operate special freight wagons to transport vehicles. A prototype wagon designed by Titagarh Wagons has already been tested by the Research Design and Standards Organisation (RDSO). A second such special rake is being developed by RDSO according to specifications provided by Siam. This wagon is expected to be tested in the next few months.
An AFTO will have marketing arrangements with companies to transport automobiles. These would be required to own full rake composition, including brake van with four per cent additional wagons as spares.
ON NEW TRACKS
- Eligibility: Companies with minimum net worth of Rs 20 crore or annual turnover of Rs 30 crore
- Registration fee: Rs 5 crore, to be paid on approval as automobile freight train operators (AFTOs) to the railway ministry
- Rakes: Companies have to induct at least three rakes and make those operational within six months of commissioning of the first rake
- Freight rates: To be notified from time to time for specific stock to be moved by AFTOs
- Freight rebate: To be in-built within freight rates specified for automobile transportations
- Wagons: Special wagons being designed and developed by RDSO for induction by third-party logistics providers and road transporters
- Rake capacity: Each to have a capacity to carry 318 small cars; already tested by RDSO