Token system riles traders

Kathmandu, May 23 :

A token system introduced by the Federation of Nepal Truck-Tanker Entrepreneurs’ Association (FNTEA) has come under heavy fire from businessmen and freight forwarders, saying the system causes inflation.

Citing hike in operation costs due to rising petroleum prices, FNTEA introduced the token system on truck freight, truck loading capacity and truck queuing from yesterday. FNTEA also fixed the freight charge of Rs 15,000 per 10 metric tonne from Birgunj and Bhairahawa to Kathmandu. Furthermore, FNTEA is also not allowing private and hired trucks to ply on these routes.

“It’s totally against the norms of competitive free market system. It’s ‘syndicate system’ in a new name, which is illegal as per the government rules,” says Birendra Thapaliya, chairman of Transport and Transit Committee at Federation of Nepalese Chambers of Commerce and Industry (FNCCI). He also said that the new system could result in major economic problem and push prices of all commodities including industrial and agricultural goods up. “This will not only affect smooth supply but also cause inflation,” he added.

Thapaliya informed that a delegation of the FNCCI today met with the Prime Minister Girija Prasad Koirala and home minister Krishna Sitaula and apprised them of the problem.

“The new system is ‘a carteling’ by some mischievous truck entrepreneurs, which is an attempt to re-introduce syndicate system in transportation sector,” says R B Rauniar, president of Nepal Goods Carriers’ Association.

Issuing a press release, the Cement Manufacturers Association of Nepal (CMAN) has also criticised FNTEA for introducing unhealthy and illegal system. FNTEA has fixed the freight charge haphazardly and imposed queue system mandatory for all trucks, CMAN said.

The association has asked for free movement of trucks without any hindrance and competitive rates on freight charge based demand and supply situation. CMAN has also said the new system would result in rise of cement prices up by Rs 30 to Rs 35 per sack.

Deepak Subedi, acting director general at the Department of Transport Management (DoTM), said that the government has allowed all entrepreneurs and truck owners to do business freely. “Government has not fixed any freight charge or permitted for anyone to introduce token or any type of system that harms free market economy and discourages competition,” he added.

However, Shree Chandra Sharma, general secretary of FNTEA defended the move saying that the system is introduced to bring the scattered truck entrepreneurs in a system. “The token system is not a cartel and freight charge has been hiked with the permission of the government,” he claimed.