Transport cartels, syndicates flourish due to political backing

Published On: August 20, 2016 01:50 AM NPT By: Republica  | @RepublicaNepal

Govt fails to enforce SC verdict against syndicates
KATHMANDU, Aug 20: Anti-competition practices prevalent in the public transport sector have often been blamed on cartels and syndicates, according to experts.

But the transport sector's anti-competitive behavior has been thriving due to backing from the government and the political parties themselves, said Purushottam Ojha, former commerce secretary.

Competition Promotion and Market Protection Act, 2006 and Consumer Protection Act, 1998, are sufficient for curbing syndicates and cartels if transport entrepreneurs were not backed by political leaders, he said, adding that the Competition Promotion and Market Protection Act 2006 clearly bars all forms of anti-competitive practices and behaviors.

Despite the presence of laws against syndicates and cartels, the country's transportation sector is dictated by syndicates, imposing their will over route permits, transport fares and other aspects of the business.

Besides Competition Promotion and Market Protection Act, 2006, and Consumer Protection Act, 1998, the Supreme Court has passed a verdict against syndicates in August 2010.

Former secretary at the Ministry of Physical Infrastructure and Transport, Tulasi Prasad Sitaula, believes that Motor Vehicles and Transport Management Act (1993) could curb malpractices in transport sector if implemented effectively.

“Motor Vehicles and Transport Management Act (1993) clearly envisages a powerful regulating body,” said Sitaula. “The act has made clear provisions related to road safety, including determination of fares, prohibition against overloading and proper management of drivers' shifts,” he said, adding that no transport association can dare to form a syndicate if these provisions are implemented effectively.

The practice of syndicate has sparked outrage among public following frequent deadly accidents. The alarming rise in road-accident deaths have been linked to negligence by transport entrepreneurs.

Even decades-old buses ply various parts of country, posing serious hazards to public safety, said Jyoti Baniya, chairman of the Forum for Protection of Consumer Rights. “Overloaded vehicles are mostly responsible for road accidents but established syndicates prevent new entrants from entering the service.”

Apart from accidents, various reports have shown that the syndicate system prohibits firms from choosing their own trucking operators and pushes up costs by 25 to 30 percent. Along with rise in costs of transportation of cargo and passengers, syndicates have also been blamed for rising number of road-accidents in the recent years.

Transport entrepreneurs have become emboldened by the belief that they can pressurize authorities simply by threatening to halt services.

“Nexus between government officials and transporters has also allowed them to prevent new entrants into the sector,” Ojha said.

“Some politicians have direct or indirect investments in the transport sector as it is a highly profitable sector,” he said.

It is not fair on the part of lawmakers to remain silence over all the malpractices in the public transport sector at a time when public have been suffering due to recklessness of entrepreneurs, Ojha said.

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