Monday, April 9, 2018

Government goes hard on transport syndicates

From The Kathmandu Post: The Department of Transport Management on Friday directed all its offices to open route permits on all the roads for competitive distribution. The DoTM recently amended the Transport Management Directives- 2004, which allows for any company to get route permits in any parts of the country in a hassle-free manner.

Following the disruption caused by a group of 11 passenger transport committees operating on the route east of Koteshwor, the transport department amended the directives to allow more carriers to openly compete in the sector. The DoTM has done away with recommendation from such committees, a hurdle for new entrants in seeking route permits.“Syndicate in public transport has persisted because the existing committees do not accept new entrants. Now, new companies won’t need such reference from these committees, meaning anyone interested in the market for healthy services can apply for road permit in any part of the country after registering with the DoTM,” said Aryal. Earlier, only those receiving approval from such committees would get the licence to operate. 

Syndicates, which exist in different parts of the country, block entry of interested companies, who provide better facilities to passengers often at cheaper rates, to curb competition.

From Setopati/Nagarik: Meanwhile, bus fares has come down following the entry of new companies. Kavre Bus Association has asked all its members to put up a notice in their public buses outlining fares for designated routes. This has come after Sajha Yatayat and Mayur Yatayat, both much organized companies and offering better services, started charging NRs35 for travel from Banepa to Kathmandu. Earlier, the local bus syndicate was charging NRs40 for the same distance. 

The present government has gone pretty hard on the syndicates. This is quite unusual and unheard of in the previous years (even when the same party was leading the government). A comfortable majority at federal and provincial and at a majority of local bodies has led to a strong government that can stand up to organized syndicates. Now, the government needs to be similarly tough on other syndicates as well. Syndicates are illegal by law (Transport Act 2049) and the Supreme Court had issued several orders asking the government to implement the law. A deep connection between quasi-political businessmen and politicians meant that the syndicates were politically protected. Furthermore, clamping down on syndicates may help to widen the tax base as syndicates because since syndicates are established under Organizations Act 2034, they do not pay taxes and operate like an NGO. Now, the government wants such syndicates to register as a company following Companies Act 2007. 

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