New Delhi : Leading third-party logistics operators are eyeing the country's first railway ministry-initiated project for the bulk transport of automobiles through rail.

Transport Corporation of India, Adani Logistics, CONYK CARTRACK (a joint venture between NYK and CONCOR) and Arshiya International Ltd, in association with Titagarh Wagons, made a presentation to the Society of Indian Automobile Manufacturers (Siam) a few weeks earlier.

Titagarh Wagons is currently designing the specialised double-decker wagons for transportation of automobiles. It is estimated the new wagons will together carry 280-300 cars in one rake. The move has come after the ministry made it clear that five companies would be shortlisted to operate a minimum of three rakes each across the 10 auto hubs in the country once the AFTO is released.

"We have been transporting automobiles in containers via railways for three years and bagging this project would be a logical extension to our business, provided it is based on freight rates that are competitive enough for us to invest in the specialised wagons," Umesh Bhanot, vice president (marketing and business development), Adani Logistics, told reporters.

According to Sugato Sen, senior director, Siam, the automobile industry hopes to increase the proportion of car transport via railways to 25 per cent over the next three years, as compared to less than five per cent now. "This will need an investment of Rs 1,000 crore if we start with 10 rakes of 45 wagons each in the initial phase," he said. Sen added that German companies Musolf and Schenker had shown keen interest in the project but were likely to do it in association with a local player.

These global logistic firms are trying to leverage their association with original equipment manufacturers like Toyota in the overseas market to extend their business here. While the entire business model of operating these rakes will depend on the freight rates that will be offered by the railways when it comes out with the AFTO, Siam estimates revenue of Rs 500 crore a year at an estimated transportation cost of Rs 10,000 per car and 500,000 cars in three years. Currently, it costs around Rs 11,800 for transporting a car via road on the Delhi-Chennai route.