KARACHI, Aug 16: Induction of more large-size buses under the Urban Transport Scheme (UTS) has hit snag due to the withdrawal of customs duty exemption by the federal government.
The exemption was allowed about three years back but withdrawn in the current federal budget with effect from June 12. The facility for the import of UTS buses had been extended to transport companies with an aim of resolving transport problem in major cities, particularly Karachi, by bringing in spacious and comfortable buses.
According to reliable sources, a number of pre-qualified firms of UTS had given the orders for delivery of buses to different bus manufacturing units. But after the withdrawal the exemption, all the work pertaining to this scheme has come to a standstill.
The firms are reluctant to bring in the buses because they would now have to pay Rs250,000 per bus as customs duty. It is learnt that three such firms had signed agreements with Hino Pak and another six with Nissan and Ghandara for delivery of buses.
"A total of 300 buses under the UTS were to be brought in during June and July but the process had been stopped due to the withdrawal of exemption in customs duty," the sources said.
Th federal government's move has not only affected the UTS in Karachi but also urban transport schemes in other parts of the country, particularly Punjab. "Orders for around 1,000 large-size buses for different cities of Punjab had been placed but the same were stopped due to the move, the sources said.
It may be pointed out here that the UTS, launched by the City District Government Karachi, has suffered a lot since 2001 owing to various reasons. There have been many hurdles in the way of implementing and promoting the scheme and one of them appeared to be the dispute over handing over of previously KTC bus depots to the city government by the provincial government.
Withdrawal exemption in customs duty dealt another major blow to the scheme. A total of 14 firms had been declared pre-qualified in the first phase and another 13 in the second phase of the UTS.
Out of the first batch, only four companies - Karachi Green Bus, Allied Services, World wide Bus and Al-Aziz Transport - succeeded in bringing in the buses on the city roads. About 125 buses are at present being run by these companies against the city government's overall target of 500 buses set for the first phase.
It is learnt that the Sindh and Punjab governments, besides the CDGK, have now approached the federal government to get the decision of the withdrawal of duty exemption reversed.
"The Board of Investment (BoI) has also asked the Centre to review the decision in the larger interest of Karachiites," the sources said. A CDGK source observed that the UTS would suffer very seriously if the federal government did not restore the facility of duty exemption without further delay. - PPI