Roads are our national property. The Government keeps selling roads to private builders and contractors who continue to collect toll charges even after their investment on building is fully recovered. They also start charging toll even before work on the highway begins. The amount charged is exorbitantly high without giving any extra facilities to road users.
The All India Motor Transport Congress (AIMTC) has often highlighted the anomalies in the present toll policies that mostly favour the concessionaires at the cost of road users. The Government has entered into MCAs with private builders and offered them 20 or 30 years time-frame to collect the toll. They also talk of taking old roads for toll collection. This is sheer commercial business where income is realized just after signing the agreement. The toll charged by the concessionaire is different from what is fixed by the Government. MCAs have been implemented by the Government for projects under the PPP scheme. These agreements are unfair as undue concessions are given to the concessionaires. This has proved a great burden for road users.
The Government is making frequent unilateral changes in the toll policy with the main objective of making it a revenue generating scheme without providing additional benefits to road users. The excessive tolls are making transport operation economically unviable. The current toll policy is flawed and is excessively biased in favour of private road builders. Toll has indeed become a bane for the road transport industry.
Further, the road transport industry is upset over the unilateral hike of TPP. An expert committee constituted by AIMTC analyzed the draft circulated by IRDA and expressed its views at its meeting with the IRDA Chairman on March 8, 2011.
Another proposal to abolish third party pool was circulated, albeit at the instance of private insurers lobby. Without consultation with major stakeholders, a decision was taken, resulting in the current hike.
Motor insurance rates were hiked from April 1, 2012, with IRDA notifying new rates for motor third-party premium ranging from 18 per cent to 23 per cent, apart from the cascading effect of two per cent hike in the service tax. The commercial vehicle segment will be the worst affected by the hike. The hike in TP premium is beyond the capacity of poor commercial vehicle owners. AIMTC resents the current trend of unilateral decision making at all levels without consultations with the stakeholders.
The Ministry of Finance has initiated a Bill to separate motor insurance from the Motor Act, 1988. It has been proposed to amend the Act of 1988 by deleting Section(s) 140 to 173 of the Act and enacting a special new Act titled the Motor Vehicles Insurance and Compensation Act, 2011.
In essence, the draft of the Bill proposes a cap of Rs. 10 lakhs on third-party compensation or on the liability arising out of death or body injury caused to a third party by any vehicle on road. Notwithstanding the same, the draft Bill proposes impounding of the vehicle involved in the accident by the police till the disposal of the claim petition.
If the amendment as proposed is introduced, its repercussions on the owner of vehicles would be far-fetched in as much as the balance amount of compensation would be recoverable by the victim from the owner of the vehicle, who may not always be in a sound financial position. In case the proposed amendments are carried out by the Government, the cost of insurance for operators will go up.
Imminent hike in diesel price
The Goa Government has done a yeoman service for the common man by reducing VAT on petrol. A similar bold initiative is also required with regard to the imminent hike in diesel prices. Diesel is the highest input cost in running of vehicles, and most of the work in this trade is contractual in nature. A correction in freight is highly unlikely due to the sudden fluctuation in the diesel price under contractual obligation.
Diesel price hike is a very sensitive issue not only to the road transport industry but also to the common man who continues to bear the brunt of the current inflationary pressure. The State Governments would do well to emulate the bold step taken by the Goa Government for saving the transportation industry.
The road transport industry won’t be able to absorb any imminent hike in diesel prices, and it suggests that the Government should reduce the excise, customs duty and VAT on diesel as the Central and State taxes make up nearly half of the diesel price.
Transporters are the worst affected by the differential pricing in different States as the vehicles travel throughout the country. Besides a uniform rate of diesel across the country, diesel and petrol should be brought under GST.
Unfair tyre pricing
Tyre companies keep raising prices at regular intervals. The fallout of such deliberate increase in tyre prices is quite adverse and always remains a contentious issue among tyre manufacturers and the transport community. It would have been better if tyre companies call a meeting of AIMTC and the related bodies and explain the reason for increase in prices.
There is a huge gap between demand and supply of tyres in the market. Imposition of anti-dumping duty will create scarcity of tyres, and the domestic players will definitely increase the price bar to reap profits. Currently tyres are being imported at a cheaper rate even after including the logistics cost, while domestic players are pricing tyres at a premium. The Government should dismantle the cartel of tyre manufacturers by revoking the anti-dumping duty on import of tyres from China.
Overloading
The problem of overloading of vehicles has proliferated all over the country. It is time that a strategy was devised to tackle it effectively. Perhaps the stand taken by the Bihar, Uttar Pradesh, Andhra Pradesh and Haryana to invoke the Prevention of Damage to Public Property Act 1984 to curb overloading could be a model step in this direction.
There is also rampant overloading on the National and State Highways, because many States have legalized overloading by issue of special tokens on payment of fees. This practice is in clear violation of the M.V. Act.
The Ministry of Road Transport and Highways should take a serious view of this. Checking of overloading falls under the purview of the respective States/UTs. There is also an urgent need to check this menace in the interest of road safety and preventing damage to roads and bridges.
Further, it must be ensured that the authority to check overloading be vested with Government organizations. Electronic weighbridges may be introduced at all toll plazas to be monitored and strictly enforced by the local transport association in conjunction with local RTOs.
Transporters and truckers are facing a lot of problems at the RTO level too. The RTOs, in collusion with anti-social elements, charge vehicles heavily on the pretext of checking vehicle documents. Further, they are charging money for no valid reason even if everything is fine with the vehicle documents.
Transporters are suffering also from arbitrary sales tax and check-post norms. There are cases when vehicles are held up just for minor issues. In such cases huge penalties are levied without giving any notice when transporters are really struggling to make ends meet.
Transporters are just carrying consignments / goods from one place to another and are nowhere involved in their purchase or sale. The bills and documents are provided by the consignor / consignee and the transporter has no authority / mechanism to check their authenticity or correctness. Yet the transporter is detained for a minimum of seven to 15 days in case an error is detected in the documents.
The vehicle impounded by the sales tax staff should be released within 48 hours. The inventory report should be furnished alongwith the receipt of the tax and penalty with full details, so that the transporter could recover the amount from the parties concerned.
In the current scenario there is absolute scarcity of trained drivers for commercial vehicles. At least 15 per cent of the vehicles are remaining idle due lack of trained drivers. Moreover, there is total lack of trained manpower in the sector. Strangely enough, there is as yet no Government move to set up driver training schools with adequate infrastructure.
Need for truck terminal
A lot of emphasis is being laid on development of infrastructure. SEZs are being planned in almost every State. This would lead to a remarkable increase in movements of trucks in and out of these States. This renders it essential to have truck terminals / logistics parks at strategic locations in every State.
At present there is no parking space available, and the trucks coming from across the country have to park on the highways, leading to traffic problems and even accidents. The AIMTC proposal envisages the setting up of a truck terminal where trucks may be stationed. This would reduce road congestion and the related problems.
Basic highways amenities
The country is developing highways and expressways in a big way. As a result, the number of road accidents is on the increase. The highways should be access-controlled, especially near villages/towns. They must have service roads and subways wherever required. This is particularly necessary for expressways built under the BOT scheme.
Cranes and ambulances may be provided at a distance of 50 km on each of the completed stretches of National Highways. In this task, the State and district transport associations as well as NGOs may be roped in under the National Highway Accident Relief Service Scheme.