Railways to support two proposed Automobile Logistics Hubs in Uttar Pradesh

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The Indian Railways has been very instrumental in terms of offering Indian carmakers a reliable mode of transport for their finished vehicles. In what may seem as a major boost to automobile logistics, Indian Railways is mulling to support the sector by providing facility and resources for two proposed automobile logistics hub in the state of Uttar Pradesh.

Monica Agnihotri, Divisional Railway Manager, Lucknow Division has expressed the willingness to provide facilities for two proposed automobile logistics hub in Uttar Pradesh under the Lucknow (LJN) division of the Railways.

“We are willing to provide facilities of having proposed auto logistics hub in our division at two locations at Bakshi ka Talab and Barhni”, she said in an interactive Webinar organized by SIAM on “Automobile Logistics – Bracing for the Future” that invited discussions and solutions on the current challenges and opportunities ahead for the automobile industry.

She also clarified that in case there is a better focal point than these two locations, then her division would be eager to change the location of the automobile hub. “If the OEMs feel that there is another focal point, then yes we can convert that place also into an automobile logistics hub instead of that place”, she stressed.

Bakshi ka Talab, located 15kms away from the main city of Lucknow and parallel to National Highway 30 has multiple automobile showrooms in its vicinity. A 120×100 meter stacking area has been proposed there, sufficient for 500 Innova-sized cars, she shared. There is also going to be a dedicated goods line and a concrete surface area for unloading automobiles.

The second location is Barhni, which is 30 meters away from the Nepal border parallel to National Highway 30 and it had the potential of becoming a hub for automobile export to Nepal, she shared.  A stacking area of 500×20 meter has been proposed for Barhni along with a dedicated goods line and concrete surface area of 20×12 meter for unloading automobiles.

While speaking about the issues and the condition of the automobile industry from a Railways standpoint, Ms Agnigotri said that unlike other sectors, freight rates have remained static for the auto sector for the past 6-7 years  whether it is the FTO or the NMG.  And it was done with a purpose because all the commodities have undergone hikes in freight rates but since this was a new market and non-conventional  sector for the railways, we wanted to promote this sector and as a result of that, despite the hikes in all other segments, the auto sector has faced static freight rates in the last 6-7 years.

 “Any adversity comes with a number of opportunities”, she said while speaking about the emergence of opportunities amidst the problems that the pandemic had brought about.  While talking about the broad parameters of the policy initiatives, she shared, “The aim is that NMG rake [trains] should be available as per demand and the waiting time should be very little.” She added how “side by side, we also have the policy of the automobile freight rate operator in which a number of good investments have taken place. We have six registered FTOs and a total of 59 approvals have been granted out of which, 27 rakes have already been inducted.”

Ms Agnihotri addressed the recurrent issue of handling facilities at any terminal that has time and again thronged the sector and spoke about how “new designs of automobile carriers are underway, especially for the two-wheeler segment, that remains to be untapped by the Railways”, in addition to tractors and heavy vehicles.

The chief guest of the webinar, P K Agarwal, Special Secretary – Logistics while talking about the issues of the automobile industry said, ”There are many unique challenges that this [automobile] sector faces; in the logistics sector, we will be very happy to take it up so that we can very well solve it”.

While speaking about the pandemic, he said “These are extraordinary times.  I think there’s not a fixed solution with the Central government to face this issue because the context of COVID pandemic varies from state to state”. He stressed on the importance of balancing both lives and livelihoods while underlining why India cannot shut down its economy amidst the pandemic.

Mr Agarwal advised automobile companies to reach out to the local administration and address the local issues. “But in case you face a problem doing so, you’re most welcome to reach out to us”, he assured. He also spoke about the importance of going multimodal and observed how the automobile industry was “a specialised need for a particular sector”.

Shashi Bhushan Shukla, Member (Traffic), Inland Waterways Authority of India gave an in-depth anlaysis of the integration of Inland Waterways with Coastal Shipping, as well as the Northeastern Region and Bangladesh and various other initiatives taken by the railways.  He spoke about the Export/Import trade with Bangladesh and recent initiatives and developments in this regard. He spoke about how markets in North Eastern India can using be accessed using the Indo-bangladesh protocol Route (IBP)  and NW2 and how in the current situation of congested LCs between Indian and Bangladesh, exporters may look at options for utilising the IWT mode, which he laid down. He also underlined the importance of Technology for Ease of Doing Business though his insightful powerpoint presentation. He also spoke about the availability of return cargo from Bangladesh and the developments regarding it.

Kalpesh Pathak, Senior Vice President, Fiat India Automobiles Pvt. Ltd. spoke about how from an industry standpoint, both survival and revival are important even amidst the negative sentiments that have emerged due to the pandemic. He underlines the importance of the automobile industry as an “economic multiplier” and broadly spoke about the short-term and long-term issues and solutions that are needed.

He believes even few investments from the Government side can lead to immense improvements at port operations like lessening transit time and costs incurred, etc. While speaking about the ports sector, he stressed on how even if the volume doubles for the auto industry, the availability of space in ports will still remain the same and hence this should be given due importance.

“I advocate collaborative approach in manufacturing and even for logistics sector, I don’t see any challenges”, he writes.

The Webinar was moderated by Sameer Bhatnagar, Partner (Transport & Logistics), KPMG in India and witnessed participation of senior officials across the Government, Automobile OEMs, Automobile Component Suppliers, Logistics Service Providers, Researchers and Consultants, Technology Providers, etc.

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