Ganging up

How powerful are the transport syndicates? This is evident in the fact that despite long and strong protests from various sectors, particularly local chambers of commerce and industry and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), they stay and their operators still do not seem to respond. Many days of bazaar bandhs enforced by businessmen in a number of western districts and the FNCCI’s tough stance indicate that the movement against transport syndicates will go on. The FNCCI has said that if the syndicates are not abolished within seven days of the swearing-in of the forthcoming government, it will resort to stronger protests, meaning the closure of businesses and industries. The syndicate system is entrenched in western and far-western parts of the country.

This agitation of businessmen is fully justified because in an economy where liberalisation and privatisation form the backbone, monopoly cannot have any place. And syndicate is the nearest thing to a monopoly, because under it a group of producers or service providers gang up to dictate prices and regulate output to maximise their group profit at the expense of the consumers. Syndicates can then overcharge consumers and they do not have to improve the quality of their products and services to stay in the business. Under transport syndicate, the consumers are not allowed to choose the best service providers at the cheapest rates possible. Therefore, there is truth to the claims that the prices of many goods in the market are inflated because of the syndicates. A few years ago, the government abolished the syndicate system, and the law, too, prohibits it. Even the Supreme Court has decided against the operation of syndicates.

The other day, the Department of Transport Management directed all operators of public transport carrying passengers or goods to stop running syndicates. But requests, appeals and mere directives have not worked in the past. The situation demands strict enforcement and a strong will on the government’s part to bring the violators to book. This willpower is seen to be deficient, at least up to now. According to FNCCI president Kush Kumar Joshi, syndicate operators have not allowed businessmen even to use their own vehicles to carry goods. This is too much, and the government must come down heavily on those who have struck at the root of competitiveness in business. Though transport syndicate is stronger the more we go towards the west of the country, yet it is in practice on most land routes of the country, including in the capital, with various transport committees monopolising particular routes and fixing fares to the disadvantage of the consumers. The existing members of the syndicates also restrict the entry of new competitors, denying them route permits. If, somehow, new operators enter the fray, the syndicate will often resort to force to drive them away, instead of engaging in healthy competition. The need for a campaign against syndicates is felt in many other sectors, too, where producers, distributors or service providers have ganged up to kill competition and reap the monopolist’s gains.