PSU, Mahindra to jointly set up first modern auto-shredding plant in India

It seems old cars are in NGT's crosshairs as 'environment enemy number 1', now that it has asked Delhi administration to deregister diesel cars aged 10 years or more. This means a lot of cars would end up being either sold outside Delhi or totally scrapped. State-run MSTC (formerly called Metal Scrap Trade Corporation), along with Mahindra & Mahindra in a Joint Venture (JV), is planning to set up India's first auto-shredding plant with an estimated investment of Rs 120 crore.

MSTC Chairman BD Singh said the company's board has approved the proposal to form the JV with Mahindra Intertrade, a venture from Mahindra Group. He added that the JV would be formed between MSTC and Mahindra Intertrade once the latter approves the proposal for the same. An MoU had been signed in this regard between the two back in April 2016.

The Voluntary Vehicle Fleet Modernisation Plan (V-VMP), currently in its draft stage, is a vehicle scrap policy. It would apply on all vehicles, regardless of engine type, bought on or before March 31, 2005. The Ministry of Road Transport and Highways (MoRTH) has submitted the draft policy to the Ministry of Finance for approval. It is expected that close to 28 million vehicles would go off the roads if the policy comes into effect.

MSTC and Mahindra are trying to cash in on the fact that India does not have a modern auto-shredding plant as of now. Currently, steel makers in India import scrap metal to recycle it into finished products. A modern auto-shredding facility would result in saving foreign currency for India by reducing reliance on imports. It would also bring the production costs of products made from scrap metal down. Using better technology and machines would help in reducing pollution.

While no location for the plant has been finalised, few locations have been zeroed in by the two companies. Among the probable locations for the plant are National Capital Region, Gujarat, Maharashtra, West Bengal and Tamil Nadu.