LAHORE, Dec 27: The ‘flawed’ policy adopted by the provincial government to replace two-stroke auto-rickshaws with the four-stroke ones is going to cost taxpayers in Punjab Rs7.3 billion extra, says a report.

The target of cutting air pollution in Lahore by replacing the highly-pollutant three-wheelers with environment-friendly autos could have been achieved at an expense of Rs1.3 billion by going for conversion of the existing vehicles into four-stroke CNG rickshaws, the report claims.

But, the authorities opted for new vehicles without carrying out any comprehensive study on the issue, raising the cost of phasing out 60,000 rickshaws in the provincial metropolis to Rs8.6 billion, says the report presented at the annual general meeting of the Pakistan Society of Development Economists last week.

The step is also resulting in delayed achievement of the clean-air target as manufacturing companies are failing to meet the demand for CNG-fitted rickshaws. City authorities, finding no other way out, have planned to ban the two-stroke three-wheelers on various city roads, including Jail Road, Canal Bank Road, and Ferozpur Road.

The report claims that the Punjab government has unilaterally discarded the conversion option terming it uneconomical.

New entrants to rickshaw assembling business endorse the government’s view, citing studies on negative economics of conversion, which were never conducted, the report alleges. It claims that the assemblers could not produce any study material when asked to substantiate their stance.

Quoting Rickshaw Dealers Association, the report claims that the conversion is possible within two hours time for around Rs22,000, per vehicle.

While, under the existing policy, a sum of Rs20,000 is being paid by the Punjab government to the Bank of Punjab as subsidy for each vehicle, the buyer is required to deposit Rs24,000 in cash and the bank sanctions Rs100,000 loan. This raises the overall per unit cost to Rs144,000. The buyer will pay Rs3,300 per month installment while the government will pay the interest.

The report argues that had the government paid the subsidy directly to two-stroke rickshaw owners, besides permitting the conversion, the 60,000 vehicles could have been replaced with CNG engines at a cost of Rs1.2 billion.

But, the authorities did not sanction a formal study to ascertain technical and economical viability of the project, it regrets.

The report also accuses the government of using arm-twisting tactics to make the introduction of new vehicles a success.

When a private company actually converted its three-wheeler to CNG at a cost of Rs22,000, and it was mentioned in the court during the hearing of a writ petition on the issue, the provincial government directed action against the firm, the report alleges.

It says that corruption at different levels in various departments is causing hurdles in the clean-air plan, claiming that at least 12 to 15 thousand two-stroke rickshaws have been registered violating the ban notification issued on Dec 22, 2004. These vehicles are yet being sold in the market, it adds.

The government also failed to conduct any study on impact of the ban on economic condition of rickshaw drivers, labourers involved in manufacturing and repair and other stakeholders in the rickshaw business, it says. The issue needs to be considered on national level by experts, the report asserts.

It says the ban was imposed emulating the policy templates from other countries, particularly India, without taking into consideration the ground reality.

The report does not paint a bright picture of success for the policy in future because of difference in conditions in Pakistan and other countries where it has somehow made achievements.

It also regrets that stakeholders, especially rickshaw drivers, were not psychologically prepared before implementing the policy.

Urging the government to overcome these flaws, it also suggests conversion of large-size vehicles from diesel to CNG fuel.