Nepal's Transport Sector Demands Policy Reforms: EVs, Accident Fund, and Regulatory Overhaul Proposed

The Nepal National Federation of Transport Entrepreneurs (NNFTE) has presented an extensive 11-point demand letter to the Ministry of Finance, urging the government to address critical issues within the nation's vital transport sector. Led by NNFTE Chairman Punyaprasad (Saroj) Sitaula, a delegation met with Finance Minister Dr. Swarnim Wagle on Monday to outline their proposals, which aim to foster a more sustainable, regulated, and investor-friendly environment.

A cornerstone of the NNFTE's demands is the call for customs exemptions on parts for electric vehicles (EVs) and robust incentives to promote environmentally friendly transportation. This move, if adopted, could significantly accelerate Nepal's transition towards green mobility, reducing reliance on fossil fuels and mitigating environmental impact. For investors, this signals potential growth opportunities in the EV manufacturing, assembly, and charging infrastructure sectors, aligning with global sustainability trends and government commitments to a greener economy.

The federation highlighted the immense economic contribution of the public transport sector, which currently holds an estimated NPR 1.3 trillion in capital and supports approximately 4 million families. They stressed the urgent need for the government to take concrete steps to safeguard this substantial investment and the livelihoods dependent on it. This underscores the sector's systemic importance to Nepal's economy, making policy stability and supportive measures crucial for its continued health and growth, particularly in a developing nation where public transport is a lifeline for many.

Among the key policy recommendations, the NNFTE has urged the immediate implementation of the report submitted by the inquiry commission, chaired by former secretary Deepak Subedi. Furthermore, they have called for a timely revision of the Motor Insurance Rate Directive 2073, emphasizing the need for regulations that reflect current market realities and ensure fair practices for both operators and consumers. Modernizing insurance frameworks is critical for managing risks and ensuring the financial viability of transport businesses.

In an innovative proposal, the NNFTE has advocated for the establishment of an 'Accident Relief Fund.' This fund would be financed through a modest levy of NPR 1 per liter on fuel (diesel/petrol) and NPR 1 per unit on electricity consumed by electric vehicles. To further strengthen this vital safety net, the federation suggests supplementing the fund with one percent of insurance premiums and direct contributions from the government. Such a fund could provide much-needed financial assistance to victims of road accidents, enhancing social security and reducing the financial burden on transport operators. For insurance companies, this could lead to a more stable claims environment, while for the public, it offers a new layer of protection and peace of mind.

Other significant demands include the abolition of the 72-hour facility currently extended to Indian cargo and passenger vehicles, a measure intended to protect domestic transport businesses and promote local employment. The federation also seeks stricter regulations on vehicle imports, amendments to the Company Act, and the implementation of a uniform tax system across the sector to ensure a level playing field. These measures aim to foster a more competitive and equitable market for Nepali transport entrepreneurs.

To enhance the efficiency and development of the transport sector, the NNFTE has proposed the formation of a powerful 'Transport Authority.' Such an authority would be instrumental in streamlining regulations, fostering innovation, and ensuring coordinated development across various sub-sectors. Additionally, they have called for a review of tipper operation times within the Kathmandu Valley, addressing concerns related to traffic management and public safety. The federation also emphasized the necessity of providing subsidies for technology-friendly transport solutions and ensuring the sector is managed in alignment with market demands, promoting modernization and efficiency.

Responding to the demands, Finance Minister Dr. Wagle expressed the government's positive stance towards addressing the legitimate concerns of the transport sector. He assured the delegation that the ministry would conduct a thorough study of their proposals and take appropriate actions. This constructive dialogue between the government and a key industry federation signals a potential for significant policy reforms that could reshape Nepal's transport landscape, offering both challenges and opportunities for investors eyeing this dynamic sector. The emphasis on green transport, regulatory overhaul, and social safety nets reflects a forward-looking approach that could drive long-term value and sustainable growth in one of Nepal's most critical economic pillars.