The railway ministry's proposal to set up automobile and ancillary hubs on railway land seems to have received only a lukewarm tepid reponse from manufacturers who have said the plan would succeed only with proper incentives.
According to a report in Business Standard, the Society of Indian Automobile Manufacturers (Siam) says the discounts on haulage and freight rates are needed to make transportation of automobiles by railway viable.
The report quotes Siam senior director Sugato Sen as saying that currently, transportation of automobiles by railways costs 15-20 per cent more than the cost incurred for carriage via road. He added there was a need for a minimum 20 per cent discount on container haulage and over 35 per cent discount on current new modified goods (NMG) freight rates to bring this on par with transportation by roads according to the report.
Nine centres have been identified by the railways for which Siam is demanding an average eight acres for each the report says.
Though the idea has not yet been been seriously taken up in India, in developed countries a major chunk of the output of automobiles is transported over railway networks which has worked out 10 per cent cheaper than roadways. For instance, in the US, the railways carry 70 per cent of the automobiles produced while the figure is 35 per cent in Europe and 16 per cent in China.
In India on the other hand, only 5 per cent of cars are transported by railways. Around 2 million passenger vehicles were sold in the country in 2009-10.