Scrapping units/ATS: States should give incentives to investors

  Minister for road transport and highways Nitin Gadkari on Tuesday said he would urge states to incentivise investors for setting up automated testing stations (ATSs) and registered vehicle scrapping centres (RVSFs), crucial for successful implementation of the vehicle scrapping policy. Addressing a press conference here, the minister said already states like Gujarat have announced […]

By:August 18, 2021 8:05 AM

 

Minister for road transport and highways Nitin Gadkari on Tuesday said he would urge states to incentivise investors for setting up automated testing stations (ATSs) and registered vehicle scrapping centres (RVSFs), crucial for successful implementation of the vehicle scrapping policy. Addressing a press conference here, the minister said already states like Gujarat have announced action plans on the scrapping policy. “The policy will be implemented by the states only. Incentivising investment will benefit states,” he said. According to the ministry, excluding land, a scrapping centre might require between `14-20-crore investment; while for an ATS, the required investment would be in the range of `6-14 crore. As per the ministry’s estimate, the facilities will have 15% internal date of return (IRR) over a period of 20-25 years. Gadkari, however, said IRR would be in excess of 18%.

In order to facilitate investors, the Centre has asked states to clear an investor’s proposal for setting up an RVSF within 60 days from the date of application, else the proposal would be deemed approved. The registering authority in the states have been directed to clear the proposal for an ATS with 60 days from the date of application. No application can be refused unless the applicant is given an opportunity of being heard. As per the Centre’s estimates, around `10,000-crore investment would be required for setting up 50-70 RSVFs and 75 ATSs in the first phase. It expects the number of ATSs to go up to 450-500 in the coming days.

Seven companies, including Tata Motors, are learnt to have already signed initial pacts with the Gujarat and Assam governments to set up businesses in the area. The scrapping policy aims at phasing out unfit and polluting vehicles. Apart from reducing pollution by scrapping around one crore vehicles that did not have valid registration or fitness certificate, the policy will also formalise the currently informal vehicle scrap industry. The policy will also boost auto sector sales and generate employment. Under the policy, fitness testing for commercial vehicles through ATS will be a must from April 1,2023. For all other type of vehicles, it will be made mandatory from June, 2024.

If fitness and its registration certificates are renewed, a private vehicle can ply on the roads even after 20 years of first registration and a commercial vehicle beyond 15 years. However, increased fitness fees and re-registration charges would act as a deterrent for an owner to retain old vehicle.

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