CHENNAI: With nearly a a million units being produced by leading companies in Sriperumbudur, Oragadam and Singaperumalkoil in Kancheepuram, it made sense to assign the first rail-auto hub in the country close-by at Walajabad. But the facility that was inaugurated by the Union Railway Minister Suresh Prabhu has not been used yet, barring a trial run.
Industry sources whom Express spoke to said freight rates were not competitive vis-a-vis road transport.
The facility is located within 12-40 kilometres from the plants of top companies like Hyundai, Nissan, Ford and Daimler Chrysler among others, but none evinced interest except Hyundai that is planning to send its first consignment in the coming weeks, that too after getting sops from Railway for using the freight service to the North-East.
The first consignment of 125 cars to Changsari, a town in North Guwahati, Kamrup district, Assam, will leave in the next couple of weeks, said V Anand, senior general manager (sales and logistics), Hyundai. He added that the company was looking to step up the output to 500 cars a month - a small fraction of the 18,000 units the firm produces each month.
“For other destinations, rail freight is costlier than road transport. Why would we prefer rail,” Anand said.
A million cars were being produced in this region, of which 3.6 lakh were being exported while the rest 6.4 lakh shipped across the domestic market.
It takes about 36 hours to take the consignment to Ennore port by road. However, because of the freight rate, which manufacturers say is ‘astronomical’, even the service to Chennai Port and Kamarajar Port in Ennore is yet to take off.
Acknowledging that the rail hub hadn’t quite reached its potential so far, a senior railway official told Express that the required infrastructure would soon be put in place. When asked about demand for reduced freight rate for the sector, the official said it would be difficult to work out.
“However, costs could be brought down by other measures like increasing load capacity of wagons which will lower the per car freight outlay drastically,” the official said, adding that there was a proposal to design bigger capacity wagons.
Car manufacturers have raised issues including inadequate land to accommodate the large number of containers bringing cars from the manufacturing plants as well as safety issues.
However, railways said they had addressed all the issues. “We have carried out several improvement works, like replacing loading ramps and completing fencing work,” the official said.