KARACHI, Feb 20: The bus makers continue to face hardships as their production, during July-Jan 2005-06, declined to 385 units from 1,032 units, registering 68 per cent decrease compared to same period last fiscal.

However, overall bus makers sales fell by 40 per cent to 528 units in the last seven months from 878 units in the corresponding period of 2004-05.

The bus makers—Hinopak, Nissan, Dong Feng, Master and Isuzu, are in hot waters since July 2005 after suspension of the urban transport scheme (UTS).

Investors are reluctant to put money in transport business after the suspension of UTS. Besides, the rising rates of diesel in the country have made the daily transport operation virtually unprofitable for the new investors.

Sources said that the City government as well as federal and provincial governments are now busy framing new policy to encourage plying of CNG buses.

This development has also created confusion among the new investors as many of the prospective players in the business have adopted a wait-and-see attitude till the government comes out with a comprehensive policy.

One of the leading bus manufacturers has recently rolled out CNG buses on trial basis at a cost of Rs0.8 million more as compared to the diesel bus which cost Rs3 million.

An executive of a leading bus making company said that so far, there has been no direction from the City government as to how the CNG buses will replace the diesel buses. “It will take at least six-to-eight months to see CNG buses plying on roads in the country,” he said.

It is true that the CNG bus costs lesser than the diesel bus-in terms of consumption and saving- but the high price of CNG bus and then recovery of its cost through profitable business is a difficult task. The commuters have already seen the closure of CNG bus service in the city owing to various reasons.

Sources said that the provincial government is planning to bring 5,000 buses but, so far no practical steps have been taken.

The executive said that the government needs to enforce the regulations and provide incentives to the operators to replace ageing and dangerously unfit buses with new ones so that operators could think about investing in CNG bus operations. He added that there is a dire need to revive the UTS which has practically fallen into disuse.

Sources said that the main factor, in pulling back investors’ interest in plying new buses, was the rising diesel prices. There has been no booking of buses by the investors for UTS during the last seven months. Many buses of the operators have already been seized by the banks for default on payment of loan instalments.

However, only those buses are plying on roads which were painted with advertisements of different companies as their operators had received payments in advance for the publicity. These companies are compelled to run those buses and as soon as the publicity agreement expires, the buses would be taken off the road.

When the UTS was launched, transporters had entered in an agreement with the government that they would charge the reasonable fare, but they had not thought of rising diesel prices which would make their per day operational cost so high.

In view of the rising diesel prices, they found it very difficult to stick to the agreement and charge low fares and ultimately, many had to suspend their operations.

Since May 2004, the price of diesel in the Arab Gulf market has increased by over 100 per cent, whereas the increase in price in Pakistan was only 53 per cent.

From July 2001 till date, the fortnightly price of diesel had been increased by 44 times, as against the rates revised downward by 23 times, while the rates remain unchanged for over 43 times.

In sharp contrast, the bus production in 2004-05 had surged by 28 per cent to 1,762 units from 1,380 units in 2003-04 due to the availability of bank credit, introduction of intra-city bus routes and rising sales under the UTS in Punjab and Sindh.