Syndicates rule roost in Pokhara

Published On: August 22, 2016 12:30 AM NPT By: Santosh Pokharel

POKHARA, Aug 22: From the cost of a boat ride in Phewa Lake and the charge for paragliding to the price of items on a restuarant menu and transport fares, syndicates have had a stranglehold on business in the tourist town of Pokhara since a long time.

Boat operators on the Phewa do not allow any new entrants, arguing that there is no need to add more boats. Similarly, the association of paragliding operators has been running a cartel to squeeze out higher profits. 

The sway of syndicates and cartels does not end there. Tourism entrepreneurs operating along the way to the Annapurna Base Camp have fixed the price of food items on the restaurant menu.  

Flouting government regulations, entrepreneurs have fixed the rate for tourist vehicles. And they justity this illicit practice on the excuse of better managing their businesses. “It is not fair to impose syndicates and cartels in the name of managing the various sectors,” said Kapil Nath Koirala, president of the local consumers' forum. “Syndicates and cartels are illegal,” he pointed out.

These are just a few examples how syndicates and cartels have been ruling the roost in Pokhara. Syndicates and cartels permeate all lucrative businesses,  the transport syndicate being only the most visible, according to Koirala. 

The syndicates have created barriers to new entrants in business resulting in little possibility of healthy competition, he opined. “Consumers including domestic and international tourists have been deprived of their right to choose.”

Around five dozens associations  representing various business sectors are registered in Pokhara. “The main purpose of these associations is to run syndicates and cartels,” Koirala added. 

These associations consider themselves to be the regulatory bodies, and that is the main problem, he added.

The entrepreneurs say they are not doing anything wrong. They have taken all their decisions just to maintain uniformity in services, said Buddi Nepali, president of Phewa Boat Entrepreneurs Association. 

According to economists, syndicates are not acceptable in a liberal economic system. “Only proper competition among market players ensures a genuine business environment,” said Lekh Nath Bhattarai, a professor of economics. Business associations acting as cartels have become more powerful than the regulatory agencies, he said, adding that the situation will get out of control if the local administration does not immediately intervene in the situation. 

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