Indian Railways sees 26% earnings growth from automobiles despite auto slump; Maruti, Hyundai major players

By: and |
Published: September 2, 2019 2:17:57 PM

Piyush Goyal-led Indian Railways has witnessed 22 per cent and 26 per cent growth respectively in the loading and earnings from automobiles during the first quarter of the financial year.

indian railways, indian railways newsAccording to data accessed by Financial Express, the automobile loading for the national transporter has been very encouraging even in the month of July.

Indian Railways achieves noteworthy growth in automobile loading! Despite a slump of 25 per cent in the automobile production and sales, Piyush Goyal-led Indian Railways has witnessed 22 per cent and 26 per cent growth respectively in the loading and earnings from automobiles during the first quarter of financial year 2019-20. According to Indian Railways, the major automobile players that are utilising the services of the national transporter are Maruti Suzuki and Hyundai Motors. Additionally, Tata Motors, Toyota, Ford and Mahindra have also starting making use of the network to transport their goods.

The automobile industry has been witnessing an unprecedented slump, but even that hasn’t stopped the growth in freight earnings of Indian Railways from that sector. According to data accessed by Financial Express, the automobile loading for the national transporter has been very encouraging even in the month of July. For New Modified Goods (NMGs), a total of 65 rakes were loaded in the month of July, as compared to 51 rakes that were loaded last year. According to Indian Railways, the number is an all-time high and translates into more than two loadings per day.

Indian Railways has taken the following noteworthy measures to get the auto sector to opt for the railway network:

  • Minimum number of rakes to be procured has been relaxed from three rakes to one rake
  • Registration fee for AFT Operators has been reduced from Rs 5 crore to Rs 3 crore
  • Auto ancillaries and spares have been permitted to be carried in both onward and return directions
  • Requirement for procurement of maintenance of spare wagon has been reduced from 4% per rake to 4% of the total cumulative holding
  • All ICDs and Container Terminals have been permitted to deal automobile traffic, thereby opening-up 86 additional terminals for automobile traffic
  • New Terminals Detroj (Western Railway), Rangapani and Baihata (Northeast Frontier Railway) have been opened for automobile traffic.
  • During the last two years, the number of routes sanctioned for movement of BCACBM (i.e., AFTO rakes) rakes has also increased from 19 to 80.
  • Induction of more Indian Railways owned New Modified Goods (NMG) rakes taking them from 10 to 25 over the last 2 years.
  • Automobile traffic has been exempted from levy of Terminal Charge

According to an Indian Railways official, due to the liberalisation of policy, new participant companies have come forward to induct rakes for transportation of their automobiles traffic. “Ove the last two years, the number of registered AFT Operators has increased from 2 to 6,” the official told Financial Express Online. “During the last two years, increase in the number of rakes (BCACBM wagon) approved went up from 15 to 59 rakes. The actual induction has gone up from 9 to 21,” the official added.

The primary routes for automobile transportation are; Delhi-NCR to Bengaluru/Chennai, Delhi-NCR to Guwahati, Delhi-NCR to Ahmedabad, Bangalore/Chennai to Guwahati and Bangalore/Chennai to Delhi-NCR.

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