Laxmi Capital News
End of transport syndicate can bring down price of daily consumables

Transport syndicate is not only increasing travel pricesand affecting quality of public transportation. This unholy nexus oftransporters is also affecting prices of daily consumables like food materialsand vegetables as well as fuel and apparel.

This is because truckers' syndicate fixes the cost oftransportation service, killing competition among truckers which could havebrought transport fare down. This high transport fare increases cost of dailyconsumables which is ultimately passed on to end consumers. Not only that,syndicate is also increasing cost of doing business for industries and businessenterprises.

“We are paying transport fare of up to Rs 50,000 pertruck during peak season of construction, while the fare is only around Rs20,000 in the lean season,” Shree Krishna Rijal, president of NepalConstruction Material Dealers Association, said. “This is not because ofdemand-supply situation. It is because the fare is fixed by syndicate oftruckers.”

The syndicate collects transport demand from us as wellas industrialists and importers, and allot trucks for transport, Rijal said,adding that fares are also fixed by the syndicate. 

Syndicates have made all trucks to joint their fold sothat they can enjoy monopoly in the market.

President of Nepal Chamber of Commerce (NCC), Rajesh KajiShrestha, said that there is no competition in transportation service in Nepal.Welcoming the government's move of ending all types of syndicate oftransporters, he said that open competition will help bring down transportationfare and ultimately price of everyday consumable goods.

The government last week announced that it would notrenew registration of transporters' committee, urging them to registerthemselves under Company Registration Act.

Hari Bhakta Sharma, president of Confederation ofNepalese Industries (CNI), said that transportation syndicate is one of thefactors behind higher cost of doing business in Nepal.

The cost of doing business in Nepal is one of the highestin the South Asia, and Nepali products are not competitive compared to productsof China and India. 

“Syndicates in transportation sector have worsenedservice quality. You have to pay higher price and the services are also notprompt,” Sharma said, welcoming the government move to eradicate syndicate intransportation sector.

“End of syndicate in transport sector can enhanceefficiency of our economy. I see GDP increasing by at least one percent if allefforts are put to curb syndicates of transporters across the country.”

Price of vegetables differs greatly from farms in Kavreand Dhading, for example, to local markets in Kathmandu Valley. Traders say oneof the reasons is higher transport cost imposed by the syndicate oftransporters.

When reconstruction works took momentum in January, truckershad increased transport cost unilaterally, forcing manufacturers ofconstruction materials like cement and steel to jack up prices of theirproducts. 

Source : My Republica, 23rd April 2018


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