Tata Motors signs MoU with Maharashtra govt to set up vehicle scrapping facility

India's largest automaker Tata Motors on Friday signed a Memorandum of Understanding (MoU) with Maharashtra government to establish a Registered Vehicle Scrapping Facility (RVSF) in the state.

The proposed scrappage centre will have the capacity of recycling up to 35,000 vehicles a year for end-of-life passenger and commercial vehicles, the company said in a statement. The company will set up the centre in association with a partner, it added.

According to the agreement, industries, energy and labour department will support in facilitating the necessary approvals as per the rules and regulations of the state government and the draft vehicle scrappage policy released by the Ministry of Road Transport and Highways (MoRTH) for setting up of the RVSF.

"It will address the intent of all stakeholders with benefits such as low import bill for scrap and crude oil, job opportunities for MSMEs, the possibility of upside in new vehicle sales for OEMs, low operation cost for vehicle owners, safer and cleaner vehicles for consumers and a sustainable environment for all," the company stated.

Earlier, Tata Motors had earlier signed a similar pact with the Gujarat government and the company states that it will "continue to work with other government bodies to more initiatives to support the vehicle scrappage policy."

Commenting on the partnership, Girish Wagh, Executive Director, Tata Motors, said, "We are happy to partner with the Government of Maharashtra to support in setting up a scrapping facility in Maharashtra. Besides the well-known benefits that appropriate vehicle scrapping offers – boosting the setup of a circular economy, this initiative will also help in reiterating our commitment to strengthen our leadership in sustainable mobility space."

Shares of Tata Motors were trading 4.26 per cent lower at Rs 471 apiece on BSE during late trade on Friday.

Earlier in August, Prime Minister Narendra Modi had launched the national vehicle scrappage policy, saying it will help phase out unfit and polluting vehicles and also promote a circular economy.

Under the scrappage policy, old vehicles will have to pass a fitness test before re-registration and, as per the policy, government commercial vehicles more than 15 years old and private vehicles which are over 20 years old will be scrapped.