May 25, 2022, Wednesday
Nepal 1:37:26 pm

Rule must not be rude on EVs for public transportation

The Nepal Weekly
February 1, 2022

By Purna N. Ranjitkar

The importers and distributors engaged in electric vehicle business are encouraged with the budget of FY 2021-22 which reformed tax rule on importing of electric vehicles. This was almost similar to the tax rule introduced by the budget of FY 2016-17 which was a turning point to incentivise the import of electric vehicles. But the budget of FY 2020-21 turned the worst as import of electric vehicles was made as costly as importing of fossil fuel vehicles.

After the budget of FY 2021-22 brought into effect, the importers, distributors and users expected a big change in EV scenario in the country. Doubtlessly, the EVs for private use took an expected speed while EVs for public transportation remained unmoved.

The private sector public transport entrepreneurs expected a big relief on importing of electric vehicle for public transportation as similar to EVs for private use. They understood the rules are positive to provide ample facilities for the electric vehicles, and waited for its proper implementation.

Remarkably, then Prime Minister K. P. Sharma Oli had inaugurated 5 electric buses in 2018. He had then announced the start of an age of ‘Electric Vehicle and that, by 2020 20 per cent of the public vehicles would be EVs.But that dream stands far away. 

Those buses were brought to ply on the road to Lumbini from Bhairahawa airport and would be operated in the Kathmandu Valley till the Bhairahawa airport become ready to operate as an international airport. The buses were purchased with the financial support of Asian Development Bank. The buses have not yet been utilised – neither in the Kathmandu Valley nor in Bhairahawa-Lumbini road. Some controversies on purchase and supply were also involved to this context.

The high level delegation to COP26 led by Prime Minister Sher Bahadur Deuba also had mentioned Nepal’s endeavour in promotion of electric vehicles in Nepal connecting that Nepal will be able to attain zero emission by year 2045.

In the present scenario, the importers and distributors of small cars, crossovers, SUVs for private uses are getting good business. But, electric vehicle for public transportation is just a few in number excluding electric tricycles and rickshaws operated in Terai region.

Sundar Yatayat, a private venture has been operating a few electric buses in the Kathmandu Valley and planning to extent in the valley and some cities like Butwal – Bhairahawa. Similarly, Sajha Yatayat is in a process to purchase 40 electric buses to extend service in Kathmandu Valley and other linking cities is still at a wait. The Bagmati Province government had decided to purchase 30 electric buses has been stayed unmoved for more reviews on purchase methodology and operational modalities. Similarly, only one taxi company had said that it has an electric car for hire. A few small vans are operated in Kathmandu – Bardibas – Kathmandu and Kathmandu – Manthali – Kathmandu routes.

However, institutional entrepreneurship in electric public transportation could not have been promoted so far. The government and other agencies need to consider on the root causes and have to act without delay to address the gaps.  

Private sector argues that financial support and subsidy along with policy support can encourage electric vehicle for public transportation. In this connection, the fund collected as Pollution Control Tax by the government on sale of each litre of petrol and diesel since many years has been swelled to around 15 billion rupees. This fund may be utilised for developing infrastructure and entrepreneurship for electric public transport systems like city bus service, city to city bus service, electric bus service for East – West Highway and also BRTs in the heavy movement sectors.

The development partners, multilateral and bilateral agencies engaged in Nepal are working with the government, non-government agencies and private sector on the ground that electric vehicle is needed for contributing to reduce climate change effects, reduce air-pollution to support public health improvement activities, utilise the electricity generated in the country and to utilise to reduce use of fossil fuel which could support narrowing the trade deficit ratio. Their activities focus more on policy dialogues linked to global activities to reduce climate change effects and policies and plans. Actually, need of the hour is generating technical and financial support to entrepreneurs who intend to operate electric vehicle business for public transportation which ultimately contribute to lessen use of private vehicles and reduce road uses. That means buses and such big capacity passenger vehicles can replace road uses. Therefore, the government, development agencies, activists and private sector need to work together on conducive environment to create.

As such, stakeholders including the government sector, development partners, INGOs, NGOs need to work jointly to find out gaps and recommend way outs and easier solutions.

A recent incident is worthwhile to mention that Sundar Yatayat was importing some 20 electric buses for public transportation purpose. But a bitter experience occurred as the tax rates and other dues on an electric bus to import come out almost similar to the total cost of a fossil fuel run bus including taxes and other dues. That means all total tax asked to pay per electric bus is nearly 4 million rupees.

The cost of electric bus can be very expensive after taxes and other expenses such as cost of electric bus, tax 1%, VAT 13%, Insurance 3.5%, vehicle registration 40,000, route permit 40,000 and so on. Those all total approximately 25% on the cost of electric bus.

However, we see as there are two measures to minimize the range of the said costs.  Measure one is all such cost (excluding cost of the eBus) should be waived or the government to cover as a subsidy. Measure two is the importer must work out on the cost of the electric bus before deciding to purchase. That means the entrepreneurs need to study the world market to find the appropriate one with optimization of the cost, comforts and commitments that the manufactures or suppliers offer.

Moreover, experts opine that the government in India provides 5 million rupees per electric bus as a subsidy to the entrepreneur. So as Nepal Government may consider on this type of support to entrepreneurs. That means the government has to reconsider the matter without delay to support private entrepreneurship with well keeping up the commitments expressed in global forums and various forums at home as well.