REMOVAL OF 20-YEAR-OLD VEHICLES: Clean-up plan on a rocky road

KATHMANDU, NOV 25 -

Though the Parliamentary Finance and Labour Relations Committee (FLRC) recently directed the government to remove public vehicles more than 20 years old from the roads, it looks like implementation of the order will be quite difficult with two concerned ministries—Ministry of Finance (MoF) and Ministry of Labour and Transport Management (MoLTM)—still at loggerheads with each other over the compensation to be provided to their owners.

Transport entrepreneurs want the government to allow them to import new vehicles with a huge waiver in customs duty. However, the MoF and the MoLTM are yet to decide whether it will be compensation or a duty exemption.

Outdated vehicles running on the roads have been blamed for causing pollution, increased road accidents in rural areas and traffic congestion. Transport Ministry officials estimate there are 10,000-15,000 automobiles on the roads that are fit for the scrap yard.

The Transport Ministry needs at least an agreement in principle from the Finance Ministry to start work on removing old autos as the matter is related to customs.

According to the MoLTM, transport entrepreneurs have agreed to dump their old automobiles if the government provides a 75 percent discount on the import duty on vehicles to replace them. Their demand is based on the customs duty waiver given to the owners of Vikram tempos which were replaced in the late 1990s by micro buses. The government had provided a 99 percent import duty and VAT exemption.

According to the MoLTM, it had proposed a tax waiver to the MoF three times. The ministry, after a joint study conducted by the Department of Transport Management and the National Federation of Nepalese Transport Entrepreneurs on old vehicles, had urged the Finance Ministry to provide a 75 percent discount on import duty.

“We have not been able to proceed with phasing out old vehicles because the Finance Ministry does not like this plan,” said Krishna Dawadi, under secretary and assistant spokesperson of the Transport Ministry. He added that the Transport Ministry would resume work on the plan as soon as they receive the panel’s official directive.

Santa Raj Subedi, joint secretary at the Finance Ministry, said that a tax waiver was not possible without a cabinet decision or a provision in the Finance Bill. “We have no plans regarding a customs waiver for new vehicles,” he added.

The FLRC had directed the Transport Ministry to take old vehicles off the roads based on the recommendation of its subcommittee. The subcommittee held two rounds of extensive discussions over transport management issues with high level officials of the MoLTM and the Department of Transport Management last week.

Shanta Basnet, coordinator of the subcommittee, said that they had directed the ministry to get rid of vehicles more than 20 years old from the roads by adopting any suitable measure. “If the concerned ministries do not move ahead to make this happen, we will call them and hold discussions again.”

The MoLTM has been planning to scrap all old vehicles in three phases. Anil Kumar Gurung, under secretary of the ministry, said that if the Finance Ministry okays the proposal, they will hold talks with transporters regarding the extent of the duty waiver. “Since there isn’t any legal provision to scrap old vehicles, it is impossible to trash them without paying compensation to the owners,” he added.

Source: Kantipur