Thanks to Muhammad Eusha for putting the effort to figure out the cause of the unreasonable fares demanded by the CNG 3 wheeler drivers (June 6, 2010 edition of Star Campus). The lack of hire-able transport causes immense suffering to most of us indeed. However, while interviewing the CNG 3 wheeler drivers is a good place to start, it will undoubtedly give a one-sided view. Hence I would like to add a couple of dimensions to the case, admittedly based on assumptions.
What is the cost price of a CNG 3 wheeler (henceforth referred to as just CNG) ? Last I heard it was 7 lacs. Once this may have been the monopoly business of our future PM, but the price has kept escalating even after the new government came in. Excluding garage, maintenance and repair charges, this leaves the owner with an annual profit of 15.6% at the rate fixed by the government (considering 1 off day per week). This is not likely to make much business sense to an investor.
Often we are hard pressed to find a CNG willing to go to destinations of our choice, fare aside. This can only be explained by the demand-supply model: there are more passengers in need of a ride than there are CNGs. Otherwise the drivers' high demands would not be met. In my experience CNG drivers charge an average of Tk 120 per trip that takes them about an hour. Now if they work 10 hours a day, utilizing 100 Tk worth of gas and pay the vehicle owners Tk 600, they are still left with a earning of Tk 500 per day, which should be a decent enough amount for their living. What really then tilts the equation in the CNG drivers favor is the condition of public busses as well as the shared short distance trips passengers are forced to take due to unplanned banning of rickshaws on crucial link roads. For example, a CNG carrying 4 passenger will earn a minimum of Tk 80 on a round trip on Kemal Ataturk Avenue. This makes the CNG driver even less willing to take longer passenger-customized routes.
If the government cared at all for the general car-less class of people wanting to lead a barely decent life, it could introduce large number of cheaper CNGs. Whilst our neighbors have the Tata Nano, can we not manufacture CNGs that cost 1 lac? Having enough CNGs on the road will ensure that competition brings down the fares as well as the owner fees. Oh, how wonderful it will be to bargain with a CNG driver that the fare will be Tk 10 less than the meter!
1 comment:
When CNGs were first introduced, their actual purchase price from India was around 1 lac. Then our (would be?) future PM and a simple minded minister took their cuts and some taxes and the price for BD investors added up to about 4.5 lacs.
I don't know the current actual price in India, but I would assume it hasn't changed too much by this time.
The government can claim some points for not allowing more imports of CNGs. Reduction in our natural gas production being one.
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