It is believed that the first automobile was introduced to Nepal in 1978. It is believed that the vehicle, which was brought by British Prince Edward when he came to Chitwan for hunting, was later brought to Kathmandu by the Ranas carrying people.

The Nepal Transport Service, founded by Karunaratna Tuladhar Dajubhai in 1959, is considered the official beginning of modern public transport, while the foundation of urban transport was laid in the same year by starting a local bus service between Kathmandu and Patan.

Sajha Yatayat, which was established as a cooperative at the government level in 2018, expanded its services to the valley and inter-districts. The Nepal Transport Corporation, established in 2019 under the full ownership of the government with the main objective of providing cheap, accessible and reliable public transport (both passenger and freight) services in remote and accessible areas, played a monopoly and service-oriented role in the transport sector for decades. From Tripureshwor to Suryabinayak in Bhaktapur (13 km) in 2032 BS with the help of China, the first electric trolley bus, Janakpur-Jayanagar railway, ropeway to transport goods from Hetauda to Kathmandu, cargo trucks on the Birgunj-Kathmandu route, and long-distance buses were operated in various districts.

Impact of system change

The direct impact of the open market economic policy adopted after the restoration of democracy in 2047 BS led to the government withdrawing from the transport business, while private entrepreneurs emerged.

The Vehicle and Transport Management Act, 2049 BS attempted to organize the transport sector. It clarified the rules of vehicle registration, permits and taxes, as well as safety, service conditions, etc. The 23-year-old act was not conducive to the situation. The federal act has not been issued, but the provinces have done so, while Kathmandu Metropolitan City and other cities have implemented local transport acts. But there is no sign of a policy solution to the parking problem and a stop to illegal activities. In the early 2050s, the 'Bikram Tempo', which is considered a great achievement in environmental history, was replaced by the Safa Tempo. Large and disability-friendly buses brought in, setting a new standard in urban transport, and the common good made a comeback. In the name of ending syndicates, the monopoly of transport committees was abolished in 2075 BS and a rule was introduced requiring registration with a company. On the other hand, with the development of technology, the trend of taking transport services through mobile apps began, which not only challenged traditional taxi and bus services, but also revolutionized the format and definition of transport services. There are 400,000 public vehicles plying across the country, and there are the same number of entrepreneurs. There is an investment of over 1.3 trillion rupees in this sector across the country. 1.5 million people have received direct employment, while 4 million families are dependent. There are about 400 associations, committees and companies and 65 percent are self-employed entrepreneurs.

Changed policies and impacts

The National Transport Policy 2059 adopted a policy that the private sector should play a major role in service operation and the government should be mainly a regulator and facilitator. Vehicles should be classified based on the quality, punctuality and convenience of service and automatic and scientific fares should be introduced accordingly. Special incentives such as tax or route permit concessions were given to provide services in remote areas. Insurance, technical inspection and pollution standards were made mandatory. Route permits should be given only after looking at the balance of demand and supply and the number of vehicles should be determined according to the capacity of the road.

The Environment-Friendly Vehicle and Transport Policy 2071 and the commitment made in the National Determined Contribution show high incentives and concessions for electric vehicles and say that 20-year-old vehicles should be replaced. After adopting a policy of imposing only 1 percent customs duty on public buses, private investment in electric buses increased. Banks have made loan limits flexible.

A 2013 World Bank study found that 75 percent of people do not choose public transport due to overcrowding, 26 percent due to personal safety, and 17 percent due to the risk of accidents. 26 percent of women between the ages of 19 and 35 said they felt uncomfortable touching.

The roads are narrow and uncomfortable. There is a lack of modern bus terminals, organized bus stops, and information systems. There are no disability and senior citizen-friendly facilities such as wheelchair ramps or low-floors. Due to the lack of reliable public transport, people have been forced to turn to private transport. Lack of parking inside and outside the home has added to the burden of private vehicles.

In addition to the Act, the Transport Directive, 2060, and the Passenger Transport Code of Conduct, 2067 are in force. The procedure for granting discounts and facilities, 2070 is being implemented. Despite everything, there is no ethics, no compliance with the law and no effective monitoring.

The routes of public transport are unscientific and do not match the nature of travel. Due to duplication, there is a compulsion to change vehicles up to three times to reach the destination. Pickpocketing, rude behavior, unruly speech, indiscriminate stopping and unhealthy competition between public vehicles that overtake each other have caused accidents.

In Bagmati Province, 80 percent are motorcycles and 3.7 to 4 percent are public transport vehicles. Within Kathmandu, 30 percent are buses, 26 percent are minibuses, 20 percent are micro and 24 percent are temps. The number of routes is more than 161. 98 percent is private investment. Despite being less than 3 percent of the total number, public transport seems to meet 28 to 56 percent of the total travel demand. According to the study, 45 percent of consumers have to walk 10 minutes to reach the bus stop, 15 percent have to walk more than 20 minutes, and 6 percent have to walk more than half an hour to access public transport. Even if it is reliable, the number of people using public services instead of private ones is expected to increase, so it seems that it should be kept at the center when planning. The impact of chaos The investment and ownership structure of the ‘one person, one vehicle’ company model is based on private sector monopoly and dispersed investment. More than 95 percent of the investment in this sector is a mix of bank loans and personal savings. Banks that invest up to 80 percent in the purchase of large or electric buses have a ‘portfolio’ worth billions. Even if committees are abolished, there is a challenge in integrated management when the actual ownership within the company is individual.

Although the government and various municipalities have a large share in institutions like Sajha, the number of such institutions and the number of vehicles is much less than the private ones. 900 to 1,000 public vehicles ply in the valley daily. There are about 2,000 transport workers, including drivers and co-drivers, working in those vehicles. The valley has a turnover of up to 30 million rupees daily.

According to a study by the National Planning Commission, Kathmandu loses about 116 billion rupees annually due to traffic jams, and about 60 percent of petroleum products are consumed in transportation. The burden of expenses has increased due to its 44 percent share in air pollution.

About 14.13 percent of monthly income is spent on transportation. Which is very expensive compared to Bangkok (1 percent) or London (2 percent). Due to the lack of reliable transportation, the city is dead like a samsa due to the lack of night business and tourist activities, while the metropolises are bustling all night.

The pain of entrepreneurs

According to a study by the Transport Authority, the profit of public transport is less than 10 percent, and that of microbuses is around 3 percent. Due to poor road conditions, traffic jams, and an unorganized route system, there is no return on investment. In particular, the burden of damage caused by accidents, additional expenses, and inadequate third-party insurance, as well as the cumbersome claim process.

After becoming a company, the financial burden of appointment letters, minimum wages, and mandatory affiliation to the Social Security Fund as per the Labor Act seems to be unbearable for self-employed and small companies with few vehicles. With the abolition of the ‘welfare fund’ committee that provides treatment and compensation, it was ‘frozen’, but companies are still unable to create their own fund and get full insurance. The government levies capital gains tax on the transfer of vehicles to the company. The work of re-evaluation of assets has become very expensive and complicated financially and administratively.

Future public transport 

Current policies and practices only cover the environmental aspect . But public transport is waiting for prudent intervention in the economic, social and managerial aspects . Clarification of jurisdiction, acceptance of government investment and regulatory capacity development, and change of business model can be the starting point for restructuring . 

Although local governments have the sole right to impose and collect vehicle taxes on rickshaws and rickshaws as per Section 64 (1) (a) of the Local Government Operation Act, 2074 BS, some provinces also seem to be duplicating the tax . The 'entry fee' imposed by the provincial government on vehicles with Indian number plates at the border checkpoints is, in principle, the work of the federation . 

The dispute over the transport authority to be formed by the federation to manage and regulate public transport in the valley in a way that ensures cooperation and coordination between the three levels of government is in the constitutional bench . The conflict of dual jurisdictions between the three levels of government, including on vehicle taxes, needs to be addressed as soon as possible. It is not only a problem of common rights but also an opportunity for a common door. Public transport is a service-oriented sector that is not competitive. The state may have to provide subsidies, even if only for qualitative changes in the current service. There are many alternative ways to expand the scope of service fees and raise investment resources.