India's first proposed rail auto hub near Chennai to help OEMs to save 20-25 % logistics cost

Facility will allow free movement from factories to the port

The railways minister's Budget speech in Delhi announced that the country's first 'rail-auto hub' would come up near this city, also the largest automobile manufacturing hub. According to sources from Southern Railway, this would be at Walajabad, near here. Industry sources said original equipment makers (OEMs) would save at least 20-25 per cent on cost by using the proposed facility.

“To capture the automobile traffic, we will soon inaugurate India’s first rail auto hub in Chennai,” said the minister. Industry sources said an auto rail hub is a facility where vehicles could be parked and transported from one place to another through rail. In the proposed facility, around 5,000 cars can be parked at a time and 300 cars be moved in one rail rake.

Walajabad station is being developed as the first common-user originating rail auto hub on the railways. It is in adjoining Kancheepuram district and the station would be 12-40 km away from the major automobile hubs of Oragadam, Sriperumbudur and Singaperumal Kovil areas. These house the manufacturing facilities of Hyundai, Nissan, Hyundai, Ford, DaimlerChrysler and others.

This hub would cater to the over one million units of four-wheelers being produced annually in these areas. The hub would also be an appropriate distribution centre for the inward traffic of  Tata, Honda, etc, converging for distribution into Tamil Nadu and adjoining states.

With an initial holding capacity of over 300 four-wheelers, it would have four to six-lane connectivity to the production and consumption centres. Adequate lighting and fencing for security are on the anvil, said Southern Railway.

Phase–1 of the hub would be ready to handle the first auto-carrying train by next month. Phase-II is due for completion in four months.

While hinterland traffic is the prime segment, Southern Railway also intends to capture the considerable export market on offer from the ports of Chennai and Ennore, through competitive pricing. One of the largest logistics provider, which helps top OEMs, said it costs around Rs 1,060 a car from a factory in the Sriperumbudur area to Chennai Port. Moving through train will cost 20-25 per cent less at a minimum, beside the saving on time. It takes 36 hours to move one load of six cars from the factory to the port through trucks, due to congestion and time restrictions.