Say no to syndicate

The decision to end syndicate was right and just but the government did not have a concrete plan to implement it

Though the government announced to end syndicate in public transportation in April this year, the monopoly in the form of transport entrepreneur committees has stalled the progress. All this while, users of public transport have had to struggle while transport operators profited out of their misery. The transport operators are politically and economically very powerful, which is why they are able to entrench syndicate effectively.

Various governments in the past attempted to break the syndicate. The move was backed by the Supreme Court’s decision in 2011 directing the government to put an end to the syndicate in transport sector. But the syndicate still thrived because National Transport Entrepreneurs Association (FNNTEA) turned out to be stronger than the government.

The government of KP Oli decided not to renew and register transport committees in April 2018. The government directed that transport committees should be registered under Company Act within July 17, 2018 deadline. During this timeframe, around 300 transport committees have registered themselves as companies. Some new operators have obtained route permits from the government under the company model. However, lack of preparedness by the government agencies in implementing the decision, coupled with the strong opposition from large committees, has led to extension of the deadline by further six months.

It seems the government will have to wait for some more time before the syndicate officially comes to an end, public transport operators register themselves as companies and start paying taxes and the people get the benefit.

Syndicate harms

Under the syndicate regime, the entire transport system was under the direct control of the transport operators who consistently flouted rules and regulations of the country. New transport operators were not allowed to enter the transport business with new vehicles and innovative ideas. The transport operators continued to operate old vehicles while barring new entrepreneurs in the system. Drivers were made to drive for hours without sufficient rest, neglecting the provisions of the transportation regulations not to allow a single driver to drive more than 250 kilometers or six hours a day. The transport operators made passengers wait as they’d not move until the entire vehicle was occupied. Negligence and arrogance on part of the transport operators led to increase in road accidents in Nepal.

The government decision to end the syndicate was right and just but it did not have a concrete plan to implement the decision. The only evident plan was to bring the existing transport committees under the company model and make them pay taxes to the government. Clearly, this is not enough. People have not felt positive change in the public transport sector. The government’s sole focus on raising taxes has dampened hopes of commuters.

Transport operators are unwilling to adopt company model because they will have to, in addition to paying taxes, provide additional facilities to their employees as required under company regulations. They have paid no attention to the fair share of gains the company model brings to them. They are entitled to own properties like any ordinary company, effectively protecting their investment.

Time to end

This is the right moment for the two-thirds majority government to improve the transportation system. But it needs to work with credible plans. The government needs to plan well on issues such as route permits, capacity of vehicles, departure timing, ticket pricing, integration of time table and ticketing system, to name a few.

The government needs to ensure scientific and systematic public transport management. The government must ensure that all the transport operators register themselves under Company Act and these companies should be brought under a single umbrella. Government involvement in transport operation authority is also required for the smooth operations of the public transportation. This is what they do in countries elsewhere.

In Germany, Munich Transport Authority has been established through shareholding from state government, Munich City, eight administrative districts and 40 public transport companies. All the public transportation (metro rail, bus, tram) are operated through a coordinated system through the authority. In Berlin, Berlin Transport Company was established in 1992 by the municipality integrating public and private transport operators.

In Delhi, government-owned Delhi Transportation Corporation operates public transportation. Private sector is motivated by profit but it is effective in management, maintenance and operations. Public sector is interested in provisioning for the best public transport services to the public. These two sectors must join hands, apply their strengths and contribute to improving the public transportation.

The government needs to expedite the process of registration of current transport committees as companies and at the same time work towards setting up a transport authority and bring all the operators under this authority. This authority must be granted the sole responsibility to plan and operate the public transportation.

Any investment in the public transport sector can be routed through this authority. This model should be replicated in all major cities of the country. To make this authority sustainable or even profitable, if required, government should be ready to subsidize the expenses of the authority as other countries have done. In Germany, Italy, the Netherlands and Belgium governments give subsidy up to 40, 60, 60 and 67 percent respectively. The focus and aim of the government should be on improving the public transport sector, not just collecting tax revenues.

The author is a transportation and traffic engineer

gajurelashish@gmail.com