Fare cut in limbo due to calculation row

- SANJEEV GIRI, Kathmandu
Fare cut in limbo due to calculation row

Feb 19, 2015-

The reduced transport fares announced by the government have not been implemented as the transportation authorities and entrepreneurs have been at loggerheads over the methodology used to determine the rates.

On February 8, the Department of Transport Management had slashed transport fares by 2.03 percent with immediate effect to reflect a drop in gasoline prices.

However, the transportation entrepreneurs have been protesting the move stating that the fare cut was unscientific and that it was not based on a cost analysis methodology that is adopted when adjusting fares.

As per the new tariff, the minimum fare on city routes is Rs 13. However, passengers currently have to pay Rs 14. If a scientific calculation method is used, the hiked rate comes to Rs 13.72. Transporters have demanded that the fare should be rounded off to Rs 14 as the rounding digit is greater than 5.

However, the government is reluctant to do so. “As per the practice, the fare should be Rs 14 according to the scientific calculation method since the rounding digit is greater than 5. But if we just go by the scientific methodology, there won’t be any change in the tariff,” Madhu Sudan Burlakoti, director general at the department.

Burlakoti added that the government was holding frequent discussions with transportation entrepreneurs to implement the newly adjusted fares.

The department said that it was also mulling taking action against the entrepreneurs who fail to abide by the government rule. Article 96 (3) of Motor Vehicles and Transport Management Act 1993 states, “No one shall collect fares in excess of the rate of fares determined pursuant to this Section.”

According to Burlakoti, the government will take action if the entrepreneurs stick to their decision. “We are studying what the act has to say regarding punishment. However, we are hopeful that we will not need to take such stern measures,” Burlakoti said.

The transportation entrepreneurs, on the other hand, said they would not honour the government’s decision as the new fares were not legal.  

“We are not making an improper demand. We are ready to accept the fare adjustment as per the scientific methodology,” said Dolanath Khanal, senior vice-president of the Federation of Nepalese National Transport Entrepreneurs (FNNTE).

He added that it was unethical of the government to pressurize them to accept a tariff that wasn’t adjusted as per the system introduced in 2005.

According to the department, the latest adjustment is in line with the significant reduction in petroleum prices. Fuel costs have a 35 percent share in the tariff structure as per the scientific methodology.

Around 65 percent of the weight has been assigned to factors like salaries and allowances of drivers, support staff and ticketing staff, garage rentals, government taxes, vehicle insurance premiums, the cost of engine oil, lubricants and tyres and maintenance costs, among others.

The department had last adjusted transportation fares on December 24, 2014. Gasoline prices have dropped significantly since then.

While retail prices of diesel and petrol stood at Rs 92 per litre and Rs 123 per litre then, prices have plunged to Rs 86.5 and Rs 109 respectively.

Since there are frequent disputes between the government and transport entrepreneurs, the government has planned to form a mechanism to review the fare adjustment every 15 days and make changes if gasoline prices fluctuate by more than Rs 5 per litre.

Published: 20-02-2015 09:03

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