Transportation entrepreneurs told to register companies within 5 days

Central body of transportation entrepreneurs have issued circulars to all its members for registration under Company Act 

KATHMANDU, May 20: After more than a year since public transport cartels were declared illegal, the central body of transport entrepreneurs has asked its member associations to register companies.

The Federation of Nepalese National Transport Entrepreneurs Association (FNNTEA) issued a circulation to all its member associations on Sunday, asking them to scrap committees and register their businesses as per the Company Act as required by the government within five days.

The government had declared all transport committees void in May last year, asking them to register companies instead. But the government repeatedly extended the deadline to register companies in one pretext or the other. The last deadline was expiring on June 2.

The government has met most of the demands placed by the FNNTEA including making an amendment to the Company Act. As per the amendment, private limited transport companies can have more than 101 shareholders. The number of shareholders for other private limited companies has been capped at 101.

Experts fear that the decision to allow such a huge number of individuals to form a company could weaken public transport sector as it could again work as a cartel. 

“The federation will not be responsible for any members who do not register companies within the given timeframe,” a notice published by the FNNTEA states.

Talking to Republica, Kumar Dahal, director general of the Department of Transport Management, expressed commitment to implement the law and also stop operation of public transport promoted by committees and ad-hoc groups.

The one-trillion-rupee public transport business has been operating as a non-profit organization so far. Except the nominal vehicle tax, the government is not getting any tax from the sector even though transport entrepreneurs are doing brisk business. 

Taxmen say the public transport sector could make significant contribution to the national treasury at a time when the government is facing dearth of resources to finance roads, bridges and infrastructure projects.

Dinkar Sharma, a former joint secretary of the Ministry of Physical Infrastructure and Transport, said that he was not surprised by the transport entrepreneurs’ move. “This shows that the government and the politicians are directly or indirectly influenced by the transport associations,” Sharma said, adding that people are still suffering despite elimination of public transport cartels.

The government last year decided to take a decision to not renew registration of transport committees as part of ending public transport cartel. But it changed its stance later on and even recalled director general of the Department of Transport Management Rup Narayan Bhattarai, who had led the drive against the cartels, to the ministry and left the department without leader for months.