Maruti aims to transport output by rail, aims to establish auto hub

Wednesday 13 June 2012, 23:58 PM by

Maruti Suzuki's plan to dispatch 1/3 of its output by rail has come across a roadblock. The land required to lay tracks from Patli station in Manesar to the manufacturer’s facility situated 18 km away could not be acquired by Haryana State Industrial and Infrastructure Development Corp. Ltd (HSIIDC). The car maker is eager to lower its reliance on road transport and wants to start transporting its output by rail to reduce transit time, costs and regular wear and tear. It is pushing the government to come up with a feasible option as it readies to increase its annual capacity to 3 million units over the next 3-4 years.

According to an anonymous Maruti Suzuki official, “Maruti alone will be manufacturing three million vehicles by 2015-16 and all these vehicles cannot go by road.” He emphasised that a viable option is the need of the hour. According to Chief Operating Officer, Production, Maruti Suzuki, M.M. Singh, besides all the issues related to land acquisition, there is also the question about whether only Maruti should have this privilege or other companies as well. Singh also leads a panel of industry experts that is liaising with the Railways to increase the possibility of collaboration between the two.

He said, “Initially, the plan was to get the railway line to Manesar as we plan to transport 35% of our total production through (the) railways.” The company already transports 5% of its output by rail from its factories in Gurgaon and nearby Manesar, as it can send only a limited number due to insufficient facilities. Singh also said, “Currently, we do it from Gurgaon railway station, which is too small for the kind of volumes we send and neither is it equipped for handling loading and unloading activities.”

Managing Director, HSIIDC, Rajeev Arora, said, “We (HSIIDC) want this railway track to be available to all industries in the Manesar area, and not just to Maruti.” Rail transport clearance (RTC) was granted to the partnership between Maruti Suzuki and HSIIDC in 2008. Soon afterwards, traffic projections were hiked to 2-3 rakes of rail traffic everyday, which translated into Rs. 40-50 lacs of daily freight for the Railways. This led the partnership to apply for the RTC again, which was granted in September 2011.

The partnership is expected to submit a detailed report to Northern Railways; then only will Railways consider granting the approval for constructing the tracks. In case the approval is granted, partners will sign a commercial agreement with Northern Railways and lay down the tracks. This will aid Maruti as it will be spared from paying the excise at several points as it does now.

At the same time, Maruti is pressurising the railways to progress on a proposed automobile hub at Bijwasan near Gurgaon. This hub will facilitate easier transport of inventory from various units in the Gurgaon-Manesar industrial belt to the other parts of the nation. An anonymous Railways official reported, “Currently, the proposal is under discussion. The auto hub, built on railway land, would be operated by a private licensee and would be open to all auto companies wanting to use it.”

The auto hub policy was put in place by the Indian Railways back in 2010. Railways, attracted by higher margins, aimed to grab higher share of the automobile transport traffic. Under this policy, the loading and unloading facilities in the hub were to be provided by Railways, while the auto hub was to be developed by a private licensee.

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