Government cuts fare

Government cuts fare

The government has announced fare cuts on public transportation by 2.03 percent to reflect a drop in gasoline prices, the Department of Transport Management (DoTM) said Tuesday. However, transport operators have said they will disregard the new tariff.

Along with passenger fares, freight rates have been reduced by 5.28 percent on Tarai routes and by 4.37 percent on hilly routes including Narayanghat, Pokhara and Kathmandu. Similarly, fares have been decreased by 1.62 percent for taxis and airport-based tourist vehicles.

A meeting headed by the Minister of Physical Infrastructure and Transportation decided to revise the fares on Monday. The DoTM said that the new fares had been calculated by taking only the cost of fuel into account which has a weight of 35 percent in the tariff structure.

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, which make up 65 percent of vehicle operation costs, have been kept unchanged.

The DoTM had last adjusted transportation fares on December 24, 2014 when retail prices of diesel stood at Rs 92 per litre and petrol at Rs 123 per litre in the local market. These fuels currently cost Rs 86.50 and Rs 109 per litre respectively.

Meanwhile, taxi fares have been reduced to Rs 36 per kilometre from Rs 37. While the flag-down rate remains unchanged at Rs 14, the increases have been reduced to Rs 0.20 per 200 metres. The fare for airport vehicles has been decreased to Rs 498 from Rs 505 for a distance of up to 5 kilometres.

Even though the government has stated that the new prices would come into immediate effect,resistance by transportation entrepreneurs over the price adjustment is likely to delay their implementation.

According to a government source, transportation entrepreneurs are not happy with the price adjustment for public transportation in urban areas. As per the new tariff, passengers will have to pay a minimum of Rs 13 on city routes. The minimum fare currently is Rs 14. Using a scientific calculation method, the rate comes to Rs 13.72, and transporters have demanded that the fare should be rounded off to Rs 14 as the rounding digit is greater than 5.

“Yes, there are some issues and reservations from the entrepreneurs’ side. But we are hopeful that they will support our decision,” said Madhu Sudan Burlakoti, director general at the DoTM, adding that their decision to fix the minimum fare at Rs 13 was based on the assumption that gasoline prices would drop further.

Meanwhile, Dolanath Khanal, senior vice-president of the Federation of Nepalese National Transport Entrepreneurs (FNNTE), said that they would accept the fare that has been calculated in a scientific method.

“We are clear on this. We will agree to the results produced by a scientific method,” Khanal said. “The government has decided to reduce fares by 2.3 percent which is acceptable. We really won’t accept the adjustment in rupee terms.”

According to FNNTE member Dharma Rimal, the federation will accept the decision of the parliamentary Development Committee. On Monday, a meeting of the Development Committee directed the government to adjust transportation fares based on the Cost Analysis Chart prepared by the government and implement them by Thursday.

The committee has also told the government to review the fare adjustment every 15 days in case gasoline prices fluctuate by more than Rs 5 per litre and change the indicators for determining the fare in the Cost Analysis Chart.

“The chart should incorporate the mechanism implemented by the Saarc nations.

We direct the Transport Ministry to make the mechanism compatible with the Saarc nations and submit the indicators adopted by them to the committee,” the committee said.

DoTM DG Burlakoti said that the department was working on a system to adjust transportation fares whenever fuel prices vary by Rs 5 or more per litre.

Source: eKantipur