24 January 2004	Saturday	01 Zilhaj 1424

LAHORE, Jan 23: The Daewoo Pakistan decided on Friday to slash prices of 30 categories of consumer items by 15 to 42 per cent at its service areas along the Lahore-Islamabad Motorway.

According to Motorway Service Areas Director Y K Lee, the bus company had lost hope of recovering its investment, and now planned to concentrate on improving service along the motorway and enhance the highway's image.

The reduction in rates has been planned on outside catering and kiosks, selling all kinds of beverages, snacks, bakery products, ice cream, cigarettes and paper items. However, inside catering, within the halls of restaurants, has been left for the time being.

Daewoo Manager Operations Ashad Gul said the company conducted a survey of the most selling items along the road. Identifying 30 items, it had decided to cut their prices from Feb 1. Display of price lists would also be mandatory for all concerned, he added.

The Daewoo, he said, had also observed that constant rise in the number of travellers did not have corresponding increase in selling largely because of the fact that almost 70 to 80 per cent of the travellers did not afford eatables at exorbitant rates. "The company now plans to push a new idea down the throat of its licensees, running 10 service areas, that they could increase sale by reducing prices," he said.

All the 10 service areas would have same prices of these items at a profit margin of eight to 10 per cent. The company had also planned to run a public call office at Kalarkahar on experimental basis, he said, adding "once it succeeds, it will open PCOs in other areas as well."

Besides, it was also trying to get branded companies involved in running vulcanising shops and workshops, though it had not succeed so far.Interestingly, the National Highway Authority claimed that it had convinced Daewoo to bring down prices by 40 per cent. The authority had been pressing the company for price cut for the last many months, as it was under tremendous pressure from the public, sources in the NHA said.

The sources said initially the company was justified to charge highly when there was no electricity, water and sewerage services available along the highway. But the PTCL and Wapda had recently laid lines and water was also available at some points. "These services, said the sources, had been providing fiscal breathing space to the company, which it had decided to pass on to its consumers."

On the other hand, the motorway licensees claimed that Daewoo was charging unreasonably high rent at its service areas. "It can bring down prices by reducing rent, but it has not done any thing so far. Instead, it is trying to cut prices by bargaining with multinationals and reduce their profit margins."

This, they said, could be done only up to a certain extent. A substantial decrease could only appear when the company reduced rent of buildings, they said.