Econ-ity » August 29, 2014

Daily Archives: August 29, 2014

Uncategorized

Transportation Syndicate: Burden on Consumers

transport syndicateIf you’ve ever travelled on public vehicles in Kathmandu, I believe our story would be somewhat similar― a constant struggle to grab yourself a seat, loads of frustration and anger. What if that overcrowded vehicle is your only option? You might complain, but that would be all. I am a student who has to communte to his college in Baluwatar, Kathmandu and I use one particular public vehicle – “Nepal Yatayat.”

The bus plies the Koteshwor –Baluwatar– Chabahil route. I always wondered why the number of buses on this specific route is limited. That the buses are always overloaded with passengers. Therefore, it is obvious that there is high demand. But why aren’t people investing in this industry despite such profitable prospect it offers. This sure is a question that seeks an answer.

So one day, one of my daily commutes, I was seated beside the bus driver. After easing myself up (somehow) into the dilapidated seat, I initiated a casual conversation. I inquired about the limited availability of buses. He replied, “Our bus association determines the number of vehicles that are allowed to ply this route”. He further added that operating a bus on this specific route would cost four times the actual amount of buying a bus. The association charges this three-fold fee to permit a new bus to entering the business. Based on our dialogue and my personal experience, it was crystal-clear to me that transport entrepreneurs were operating a syndicate. Now this was supposed to have ended by fiscal year 2011/12 as supreme court had termed these forms of fraudulent associations illegal. The duty of an accountable state then would have been to enforce rule of law and serve the consumers – the people that were bearing the cost of such illegal activity. It is a pity that the government could not, and till date, has not been able to do its duty to the people. Supreme Court’s order against transport syndicates has not yet been translated into any form of action. All attempts of consumer rights advocates have gone in vain.

What if someone wants to operate a bus on a specific route? Why should the route permit cost thrice as much as the cost of the vehicle itself? The entrepreneurs’ association seems to have created an artificial entry barrier in Nepal by offering special previleges to a bunch of cronies allowing them to reap the benefits of a public infrastructure built by the state by taxing lawful citizens of the state.

What syndicates do is limit the resources by creating entry barriers and playing around the market causing unnaturally high prices which in the end has to be borne by consumers like you and me. By killing quality and stifling innovation, syndicates allow for market monopolies to firmly set themselves into the system and we, the consumers, are made to pay exorbitant prices for low quality goods and services in the wake of lesser options being available to us.

As a consumer, and as a future taxpayer, it gives be great displeasure in learning that the state has been unable to acknowledge these day-to-day practicalities that rob the taxpayers of the kind of quality service that they are entitled to. All it requires from the state’s side is to monitor these market malpractices and instate the rule of law. I firmly believe that competition in market renders better services to consumers at lower prices and I wish that these syndicates are broken as soon as possible for the sake of protecting consumers’ rights.

Suraj Dhakal

About Suraj Dhakal

Suraj Dhakal, a student of Development Studies works with Research Department at Samriddhi, The Prosperity Foundation. Mr. Dhakal was previously associated with We Inspire Nepal (WIN), a youth led leadership and personal development organization.

Published by: