Southern Rly eyes Rs 500 cr from auto sector in 10 years

Signs MoUs with ports to bring down cost for export of cars

For the first time in the country, a division of Indian Railways has introduced an ‘auto vision’ document. In its road map unveiled on Tuesday, the Southern Railway — which caters to the Chennai automobile cluster —has set a target of generating a revenue of at least Rs 500 crore in the auto segment in 10 years time. This entails growing revenue at a compounded annual growth rate of 30 per cent.

The vision document, released by Vashishta Johri, general manager, Southern Railway, seeks to enhance its share in exports and coastal roll-on/roll-off segment to 90 per cent, accruing a revenue of Rs 90 crore.

The division also seeks to take the rail share to 50 per cent in the container-based export market, generating annual revenue of Rs 60 crore. It will run two parcel express trains per day for maintenance spares and supplementary goods to leverage on the warehousing business. It eyes Rs 150 crore from this business.

However, higher freight costs deter auto industry players from using trains for transporting goods. V Anand, manager, Hyundai Motor India, which sends six per cent of its traffic through trains, says that cost is a major challenge.

Ajeet Saxena, chief commercial officer of Southern Railway, said the division would bring down the cost to attract automotive cargoes. For example, it currently costs around Rs 1,500 to send a car by train, while it takes only Rs 1,000 via road. To bring down costs, the Southern Railway has signed pacts with Chennai and Kamarajar Ports. According to officials, these ports have agreed to bring down the cost in wharfage and handling charges, which will bring the cost considerably.

The limited availability of rakes and slow speed are some of the key reasons that have restricted the growth of freight movement through railway.

ON ROAD TO REFORMS

• Vision document targets revenue growth at a compounded annual rate of 30%
   
• Seeks to enhance its share in exports and coastal roll-on/roll-off segment to 90%, accruing a revenue of Rs 90 cr