Kolkata: An engineering company that manufactures components for the railways, the G.P. Goenka-controlled Stone India Ltd, on Wednesday announced it was entering the logistics business through a technical collaboration with US-based RailRunner NA Inc.
Stone India has formed a subsidiary called Stone Intermodal Ltd, which will start manufacturing freight cars capable of running both on roads and on railway tracks. It will be spending Rs150 crore in two phases to build the new manufacturing facility. The firm will not only manufacture these freight cars, but will also eventually lease them out to shippers.
New technology: Stone India chairman G.P. Goenka says the freight cars manufactured by the firm will be capable of running both on roads and railway tracks and will revolutionize freight movement. Indranil Bhoumik / Mint
“This will revolutionize freight movement in India,” said Goenka. “But I don’t expect miracles within a year.” The launch of these freight cars would substantially reduce shipment time and costs, he added.
Under an exclusive 10-year pact with RailRunner, Stone India will use its patented technology to manufacture freight cars in India. Designs of the new freight cars have been submitted to the Union rail ministry for approval. Stone India expects to start manufacturing the new freight cars within a year.
“Whereas a train can carry up to 45 conventional container carriers at a time, RailRunner’s technology makes it possible for a train to carry up to 50 containers,” said Amitava Mondal, Stone India’s managing director and chief executive officer. “Also, because the weight of these freight cars is only 11 tonnes as opposed to 18-20 tonnes of conventional container carriers, running these is going to be far more fuel-efficient.”
Stone India and RailRunner started discussing a tie-up in January last year. Initially, the latter was keen on taking an equity interest in the venture, but Goenka said he persuaded RailRunner to agree in the end to a fee-based technical collaboration.