If you are interested. Busing blues Wriggling out of the clutches of cartels (05 March 04 - 11 March 2004) | On 23 February, 2004, Nepal and India signed an agreement to promote direct bus services between the two countries. This meant that Nepali long-distance buses are now able to take passengers to India without much red tape, while Indian buses can bring in travellers to Nepal. The Hotel Association of Nepal (HAN) and Nepal Association of Tour Operators (NATA) welcomed the agreement, saying that it makes it easier to bring in more tourists, but the Federation of Nepali Transport Entrepreneurs (FNTE) protested against it on grounds of patriotism, among other reasons. It’s easy to understand why HAN and NATA would support the agreement, but what could explain the FNTE’s mindset? As a child in the late 70s and early 80s, I fondly remember listening to commercial jingles for various long-distance bus companies on the one and only entertainment station at the time — Radio Nepal. The major arterial highways had just opened, linking Kathmandu to parts of eastern and mid-western Nepal. The good roads made it easier for buses to run day and night. Seeing opportunities to make money, Nepali entrepreneurs, with permission from the Panchayat government, started transport companies. Soon these private sector companies were jostling with one another on the radio to claim how much ‘comfort’ their buses gave passengers. To attract customers, they added to the competition by offering ‘cabin coach’, ‘video movies’, ‘deluxe seats’ and other services. Indeed, the jingles (especially the one of Kankai Mai Yatayat for early-morning buses leaving for Kakadbhitta from Kathmandu) were catchy and fun, patterned as they were after memorable Nepali folk songs. Besides amusement, the jingles gave one a sense of the kind of fierce market-based competition that the bus companies were then engaged in. This sort of competition went on till the early 90s, after which owners of bus companies, with ties to unions affiliated with political parties, got together to form regional and national federations to protect their own interests. With entities such as FNTE eventually holding sway, this led to the inevitable for the bus companies: no need to compete with one another as aggressively as before. The catchy tunes on the radio stopped, there was widespread price-fixing, bad service and fewer choices for most passengers. Bus owners emerged as a minor political force that could call on and off chakka-jams in any road-linked part of the country. The result? A comfortable cartel that has been chugging along with the best of all worlds: political patronage, almost no market pressure and guaranteed profits. Used to operating out of such a cocoon, it is no wonder that the Indo-Nepal agreement would make the FNTE members nervous. With the agreement in place, Indian bus operators need not play by FNTE’s inward-looking and cartel-friendly rules. To make money, most likely, they will offer different service packages and wider choices that appeal to both Nepali and Indian customers interested in visiting either country. Sooner or later, their operating to and from Nepal will also force us to deal seriously with issues of adulterated petrol, the needless traffic-related deaths and destruction that occur all too often on our highways and how transport-related services (auto repair, insurance, advertising etc) are bought and sold in the marketplace. The FNTE members can bury their heads in the sand and continue to shout for protection by launching chakka-jams. Or they can wisely accept the change as an opportunity to improve business and access new markets in India and Nepal. Let’s hope that they take the latter route by first ungluing themselves from FNTE (which has now outlived its usefulness) to put out even catchier, more competitive jingles on the radio. Source: - http://www.nepalitimes.com/issue/186/StrictlyBusiness/4017