Rail operators transport business

The automobile transport business in India is heading for a jumpstart with all major automobile companies setting up manufacturing plants in the country. Railways, which currently carries about 25% of automobiles, is hoping to cash in on this boom.
Pipavav Rail Corporation Limited (PRCL) and Adani Logistics, the two players that have received in-principle approval for rail container operations, are in the process to finalise their plans to foray into this business. A Rail Bhawan official said, “Adani and PRCL have asked for permission to begin automobile transport. They are designing special containers for the purpose.”

Container Corporation of India (Concor) has also been keen to make an entry into the auto transport business. In fact, it had signed a memorandum of understanding with NYK, a Japanese shipping company, in January. However, the venture seems to have hit a temporary roadblock with the railway ministry asking it to rework its business plans.

Concor managing director Rakesh Mehrotra said the company has been asked to revise its production costs and haulage rates. He is. however, hopeful of beginning the venture soon.

Road to Rail
• PRCL and Adani Logistics have received in-principle approval for rail container operations
• Container Corporation of India is also keen to make an entry into the auto transport business

Currently, Indian Railways are the only operator transporting automobiles. But it is moving only 35 to 40 rakes every month. Railway officials admitted that it is only a “side business” for them and agreed to the vast untapped potential of the market. Currently the Indian Railways rake in about Rs 50 crore annually from the business. Its major customers include Maruti, Hyundai, Tata Motors, Mahindra and Mahindra and Hero Honda.

Another major customer is Suzuki Motors, which has asked the railway ministry to design special containers for transportation of its vehicles. The auto major wants customised double or triple stack containers for the purpose. Railways, however, does not want to be directly involved in the business and hopes to transfer the trade to the 14 private container operators. The Suzuki deal is set to bring in about Rs 250 crore annually to the transporter.