Taxicabs worth Tk 80 crore turn into junk
Cheap Indian cars are to blame
Taxicab operators are now counting the cost of their wrong choice of vehicles that forced them to pull 90 per cent of cars out of service much before their average lifetime expired
.
Their association estimates that return on their Tk 200 crore investment in the nascent service in last six years was much less than expected as light vehicles with low engine capacity lost their resale value. Cars worth more than Tk 80 crore turned into junks.
The blame goes to cheap Indian cars with low capacity engines, which made their way into Dhakas streets due to cost-cutting exercise of operators and promotional prices offered by local car dealers.
Affected cab operators now point their finger at the governments wrong policy that paved the way for low quality Indian cars and forced more than a half of taxicab companies to fold within years of operation.
The insolvent operators are now avoiding the commercial banks which invested in taxicab services. Some others have their garages filled with junk cars and scraps. In 2003, the communications ministry gave permission to 10,000 taxicabs to ply in the city, opening the floodgate for poor quality Indian cars. Initially these taxicabs were given 8-year road permit which was later extended to 10 years. But within five years, taxicab operating companies which invested crores of taka through bank loans realised that their investment went down the drain.
Indian made cars are not viable for taxicab service, said Mannan Chowdhury, president of Bangladesh Association of Taxicab Operators. The realisation is, however, late and proved costly as more than 70 operators lost about Tk 80 crore in taxicab business.
Only 1,000 taxi cabs are in operation in the capital while the rest are turned into scrap, he added. Anudip Auto Ltd, which got permission to run the highest number of nearly 1600 taxicabs, is now guarding two yards of scraps of Indian cars one at Mirpur and the other in the outskirt of the capital.
Cab Express (BD) Ltd. Cab One, Cab Bangla Ltd, Cab Salida Ld, Cosmo Cab (Pvt.) Ltd, Nihon Taxi Cab, Cosmo Cab (Pvt.) Ltd, Yellow Lines Ltd and Orion Texi Cab (Pvt.) Ltd were among the companies which pressed low-quality Indian cars into service and suffered losses.
Out of 70 operators, 40 have already folded their business and distanced themselves from banks after failing to repay loans.
Banks and leasing companies like Islamic Bank, UCBL, ICB Islamic Bank formerly known as Oriental Bank, AB Bank, Phoenix and Uttara Finance and Investments Limited, which provided the loans, are planning to file cases against the loan defaulters. An official of the Islamic Bank on condition of anonymity told New Age they are following rules and regulations to realise their loans as they found many taxicab companies simply unresponsive despite repeated reminders.
Taxicab operators last week at a press conference demanded waiver of bank loan interest. They have been urging the communications ministry for the last couple of years to intervene into the matter for the protection of their business. Some operators including Navana Tax Cab and Nippon, however, stood out from the rest, and they are doing well with Japanese cars.
Navana manager Ainul Kabir Chowdury told New Age that his company operates around 400 cars, all Japanese, to run their cab business since 2000.
Lack of feasibility study to determine whether the Indian cars were viable for running such business was the main reason for the present debacle, he pointed out. He said the government has of late realised the mistake and decided to allow cars with engine capacity of above 1300 cc for taxicab services from the current fiscal year.
http://www.newagebd.com/2009/aug/04/front.html
Cheap Indian cars are to blame
Taxicab operators are now counting the cost of their wrong choice of vehicles that forced them to pull 90 per cent of cars out of service much before their average lifetime expired
.
Their association estimates that return on their Tk 200 crore investment in the nascent service in last six years was much less than expected as light vehicles with low engine capacity lost their resale value. Cars worth more than Tk 80 crore turned into junks.
The blame goes to cheap Indian cars with low capacity engines, which made their way into Dhakas streets due to cost-cutting exercise of operators and promotional prices offered by local car dealers.
Affected cab operators now point their finger at the governments wrong policy that paved the way for low quality Indian cars and forced more than a half of taxicab companies to fold within years of operation.
The insolvent operators are now avoiding the commercial banks which invested in taxicab services. Some others have their garages filled with junk cars and scraps. In 2003, the communications ministry gave permission to 10,000 taxicabs to ply in the city, opening the floodgate for poor quality Indian cars. Initially these taxicabs were given 8-year road permit which was later extended to 10 years. But within five years, taxicab operating companies which invested crores of taka through bank loans realised that their investment went down the drain.
Indian made cars are not viable for taxicab service, said Mannan Chowdhury, president of Bangladesh Association of Taxicab Operators. The realisation is, however, late and proved costly as more than 70 operators lost about Tk 80 crore in taxicab business.
Only 1,000 taxi cabs are in operation in the capital while the rest are turned into scrap, he added. Anudip Auto Ltd, which got permission to run the highest number of nearly 1600 taxicabs, is now guarding two yards of scraps of Indian cars one at Mirpur and the other in the outskirt of the capital.
Cab Express (BD) Ltd. Cab One, Cab Bangla Ltd, Cab Salida Ld, Cosmo Cab (Pvt.) Ltd, Nihon Taxi Cab, Cosmo Cab (Pvt.) Ltd, Yellow Lines Ltd and Orion Texi Cab (Pvt.) Ltd were among the companies which pressed low-quality Indian cars into service and suffered losses.
Out of 70 operators, 40 have already folded their business and distanced themselves from banks after failing to repay loans.
Banks and leasing companies like Islamic Bank, UCBL, ICB Islamic Bank formerly known as Oriental Bank, AB Bank, Phoenix and Uttara Finance and Investments Limited, which provided the loans, are planning to file cases against the loan defaulters. An official of the Islamic Bank on condition of anonymity told New Age they are following rules and regulations to realise their loans as they found many taxicab companies simply unresponsive despite repeated reminders.
Taxicab operators last week at a press conference demanded waiver of bank loan interest. They have been urging the communications ministry for the last couple of years to intervene into the matter for the protection of their business. Some operators including Navana Tax Cab and Nippon, however, stood out from the rest, and they are doing well with Japanese cars.
Navana manager Ainul Kabir Chowdury told New Age that his company operates around 400 cars, all Japanese, to run their cab business since 2000.
Lack of feasibility study to determine whether the Indian cars were viable for running such business was the main reason for the present debacle, he pointed out. He said the government has of late realised the mistake and decided to allow cars with engine capacity of above 1300 cc for taxicab services from the current fiscal year.
http://www.newagebd.com/2009/aug/04/front.html
