Govt to subsidise transport on non-profitable routes

Posted in Labels: | 12:27 AM

14 December 2009

Most routes that haven’t seen buses will soon have transportat services available with the recent government approval to subsidize the operation of bus services on non-profitable routes in the country.
The government will bear the interest on loans taken by the willing operators to buy transport bus(es) while the principal amount will be paid by the operators themselves.
The most likely arrangement to be approved, according to the Director for Road Safety and Transport Authority, Tashi Norbu, would be 30:70 percent, where 30 percent of the cost shall be borne by the operators and the interest on rest will be taken up by the government.
The very same scheme, which was applied in the past, failed owing to small numbers of commuters. Since it stopped in 2007, no private entrepreneurs have shown any interest to take up business in non-profitable routes owing to high cost of operation and low return.
The Director said how the scheme would work is yet to be seen. To maximize profit, the operators would be allowed to charge higher fares, a little more than the normal fares, if road conditions are bad.
The need for such services was felt for the convenience of the people, particularly in the rural areas. Most of the remote gewogs today do not have transport services. The roads are mostly rough feeder roads.
“Hiring vehicles has become very expensive for me but I don’t have any choice as my family lives in Samdrup Jongkhar,” said a businessman from Lhuentse, adding that a cheaper transport arrangement would be a blessing.
However, whether all the non-profitable routes will have bus services would depend on the number of proposals that come forth. “We have already received some proposals through the regional transport offices,” said Tashi Norbu.
Today, there are less than 10 non-profitable routes in the country, mostly from Samdrup Jongkhar to nearby dzongkhags. Chances are that places like Pemagatshel will not have bus services because of people being dependent on gypsum trucks that ferry people on a regular basis.
Although it was decided that the subsidy would come into effect from the next financial year, the Director said it could be implemented immediately provided that proposals come through. “It’s not necessary to wait – we can request the government,” he said.
The Ministry of Information and Communications has requested the Finance Ministry to approve the proposals so that the operators could start the procurement process. The ministry, so far, has received two proposals, one for a bus service between Samdrup Jongkhar and Trashiyangtse and the other between Sarpang and Singye Gewog.
According to Tashi Norbu, there has to be only about Nu 0.3 to 0.5 million annually as loan interest, which won’t have huge financial implication on the government.
Subsidy is included as an activity in the 10th five-year plan. Meanwhile, bus operation between Samdrup Jongkhar and Phuentsholing highway, that was stopped in 2000, will resume soon.

Most routes that haven’t seen buses will soon have transportat services available with the recent government approval to subsidize the operation of bus services on non-profitable routes in the country.

The government will bear the interest on loans taken by the willing operators to buy transport bus(es) while the principal amount will be paid by the operators themselves.

The most likely arrangement to be approved, according to the Director for Road Safety and Transport Authority, Tashi Norbu, would be 30:70 percent, where 30 percent of the cost shall be borne by the operators and the interest on rest will be taken up by the government.

The very same scheme, which was applied in the past, failed owing to small numbers of commuters. Since it stopped in 2007, no private entrepreneurs have shown any interest to take up business in non-profitable routes owing to high cost of operation and low return.

The Director said how the scheme would work is yet to be seen. To maximize profit, the operators would be allowed to charge higher fares, a little more than the normal fares, if road conditions are bad.

The need for such services was felt for the convenience of the people, particularly in the rural areas. Most of the remote gewogs today do not have transport services. The roads are mostly rough feeder roads.

“Hiring vehicles has become very expensive for me but I don’t have any choice as my family lives in Samdrup Jongkhar,” said a businessman from Lhuentse, adding that a cheaper transport arrangement would be a blessing.

However, whether all the non-profitable routes will have bus services would depend on the number of proposals that come forth. “We have already received some proposals through the regional transport offices,” said Tashi Norbu.

Today, there are less than 10 non-profitable routes in the country, mostly from Samdrup Jongkhar to nearby dzongkhags. Chances are that places like Pemagatshel will not have bus services because of people being dependent on gypsum trucks that ferry people on a regular basis.

Although it was decided that the subsidy would come into effect from the next financial year, the Director said it could be implemented immediately provided that proposals come through. “It’s not necessary to wait – we can request the government,” he said.

The Ministry of Information and Communications has requested the Finance Ministry to approve the proposals so that the operators could start the procurement process. The ministry, so far, has received two proposals, one for a bus service between Samdrup Jongkhar and Trashiyangtse and the other between Sarpang and Singye Gewog.

According to Tashi Norbu, there has to be only about Nu 0.3 to 0.5 million annually as loan interest, which won’t have huge financial implication on the government.

Subsidy is included as an activity in the 10th five-year plan. Meanwhile, bus operation between Samdrup Jongkhar and Phuentsholing highway, that was stopped in 2000, will resume soon.

By Sonam Pelden in Bhutan Observer

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