Government announces rules for setting up vehicle scrappage facilities

The Ministry of Road Transport and Highways has detailed the set of rules that will govern the setting up and operation of vehicle scrapping facilities. These facilities are to be set up as part of the vehicle scrappage policy recently announced by the government and will be used to process the vehicles termed fit to be scrapped as per the new guidelines.

The MoRTH will set up an online portal to register these vehicle scrappage facilities allowing owners to be able to scrap their vehicles at any such facility across India. Firms will be given a 10-year license to operate these facilities, extendable over 10 year periods with the registration/renewal process to be completed in 60 days. These facilities will be given access to the VAHAN database to update the status of vehicles being scrapped as well as issue the certificates of deposit and scrapping.

The certificate of deposit can be used by the scrapped vehicle's owner to avail of the incentives promised under this scheme. The facility will also need to keep a cut-out of the scrapped vehicles' VIN for six months after the vehicle is scrapped. These facilities will also need to verify the owner and the vehicle's legitimacy through the NCRB database as well as ensure pending fines are cleared.

These scrappage facilities will need to meet ISO quality standards with 12 months of beginning operations and will need to have enough physical area for storing vehicles designated for scrappage. Equipment for derisking and de-polluting these end-of-life vehicles should be in place too. These facilities will also need to recycle hazardous waste like batteries, rare-earth metals and lithium-ion components or tie up with other establishments to carry out these processes.

These facilities are set to become a significant business opportunity with MORTH data suggesting there are over 17 lakh medium and heavy commercial vehicles that are older than 15 years without any valid fitness certificate, 51 lakh light motor vehicles older than 20 years of which 34 lakh light motor vehicles are older than 15 years. Firms like Renault and Tata Motors have decided to set up such scrappage facilities to capitalize on this, the notable incentives to owners being another draw.

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