Pollution Control Fund for an appropriate use

By Purna N. Ranjitkar

The Office of the Auditor General (OAG), in around mid-Augustof 2021, revealed that the Government of Nepal is not utilising the fund collected as Pollution Control Fee. The fund is being collected in use of every litre of petrol and diesel since the Fiscal Year 2065-66.

The amount collected as pollution control fee or tax or charge has been deposited into the consolidated fund of the government. Despite collecting such a huge amount, it does not seem to have been spent on prevention and control of air pollution any way so far.

The OAG had suggested that the government is obliged to spend the fee only for the purpose for what it has been collected.

In early October of2016, this scribe had mentioned (in an article published in The Nepal Weekly on Tuesday 2016 October 04) that the fund collected as Pollution Control Charge so far was billions of rupees at that time. Collection (1) in 2065/66, 2066/67, 2067/68, 2069/70 was 1,72,77,29,000.00, (2) in 2070/71 was 70,11,00,000.00, (3) in 2071/72 was 86,08,00,000.00 and (4) in 2072/073 was 51,66,00,000.00. Nepal Oil Corporation had informed that Rs. 3,393,600,000.00 had been deposited to the government account as Pollution Control Charge.

The deposit amount till the end of FY 2077/78 (mid-July 2021) was Rs. 14 billion 955 million. Likewise, the amount collected as Pollution Control Fee in the first six months of current FY 2078/79 crossed 1.8 billion rupees.

Most of the government agencies concerned to environment, air pollution, renewable energy and public health normally do not talk about the fund, the amount collected so far and its utilisation.

It is worth to recall that the Government of Nepal had realised that smoke belching vehicles are the main cause of pollution. This has been reflected on the Environment Protection Act introduced in BS 2053. The act, introduced 25 years back, is opening of the ways for the government to go forward with necessary actions to control pollution.

The Act introduced 25 years back should go for thorough revision to match with the current situation. Obviously the pollution level has been at the worst situation. As such, actions should be taken without any delay. It is also worth to realise negative impact of pollution to nature and human life in last 25 years turned worst. Pollution Control Fee is a fund collected initially with a plan to implement in the Kathmandu Valley. But later, the amended act had paved way to implement in the entire country.

Fiscal Act 2053 clause 22(1) introduced in the Fiscal Year 2053/54, which says that the smoke belching by the vehicles are the main cause of increasing pollution. As such, pollution control activities shall be carried out by raising a charge of half a rupee on the fossil fuel consumed in the Kathmandu Valley. The circulation published in the Gadget was also clear to mention that the collection of the fund will be effective from the date as directed. The directive remained unpublished for years. Later the Fiscal Act 2066 brought into effect and collection of Pollution Control Charge has been initiated, and continued till date. The fee also has been hike to Rs. 1.50 per litre with effective from the Fiscal Year 2074/75.

Petroleum products are not produced in Nepal. All such products are brought in from other countries. Nepal Oil Corporation (NOC), the state owned agency is the only importer of the petroleum products to the country. It sales fuels through outlets located in various parts of the country to the retailers. As such, Pollution Control Fee is paid by NOC initially, and collects from the users at a built-in price basis.

The government had created a favourable situation for electric vehicles import and utilisation. The tax rule, availability of electricity and installation of charging stations in the cities and on the routes of long route travel are supporting rapid increase of EVs. So as many types for electric vehicles have been imported for mainly private uses.

However, electric vehicles for public transportation have yet to be visible. Only a few electric buses and microbuses have been brought into service in the Kathmandu Ring Road, Kathmandu – Sindhuli – Kathamndu, Kathmandu –  Manthali – Kathmandu.

Public transport (also known as public transportation, public transit or mass transit) is a system of transport for passengers by group travel systems available for use by the general public unlike private transport, typically managed on a schedule, operated on established routes, and that charge a posted fee for each trip.

Examples of public transport include city buses, trolley buses, trams, (or light train) and passenger trains, rapid transit (metro/subway/underground, etc.) and ferries. Three wheelers microbuses and taxi cars also means of public transportation.

Quality and availability of public transport make an impact on the welfare and income earning potential of people. Good quality and targeted public transport also helps in pulling people away from cars. Intensive public transport use not only contributes to people’s welfare but also helps enhance urban environment. For women in developing countries, public transport plays an even more important role, providing access to social, economic and life enriching activities and services. In the above context, cities in Nepal need safe, efficient, reliable and affordable public transport to achieve equitable and sustainable development.

They are important for lessening number of vehicles on the roads to reduce traffic pressure, road uses, reduce air pollution, reduce accident rate, reduce time of travel from one place to another. Moreover, well managed public transportation system contributes to raise the standard of civilians’ life. They would prefer to use public transport for a ‘dignified ride’ as well.

Moreover, the commitments of high level delegations to global forums, declarations and documents are important to keep up. Similarly, the commitments reflected in the Constitution of Nepal, and policies formulated in order to preserve environment, public health and social-economic standards are also equally important to keep up. These tasks must be taken seriously by the government side first.  

Therefore, the government authorities may be advised to consider to develop public transportation system well managed with purposes concerned to climate change reduction, conservation of environment, reduce air pollution, utilisation of renewable energy, reduce public health hazard and so on. Reduction of use of fossil fuels is another vital aspect to this context.

The said aspects can be derived from promotion of electrified public transportation system. Moreover, electric buses are the best solution to utilise existing infrastructures such as road condition and possibility of private entrepreneurs to engage.

Therefore, the electric bus services should be made at least fairly profitable to the entrepreneurs or the operating companies. So that government must be open to provide financial and technical supports utilising Pollution Control Fund and other available and possible funds within the government coffer and or global, multinational and bilateral funds related to climate change movements. That will be one big thing for electric public transportation to go ahead in Nepal.