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Tuesday February 7th, 2023

Sri Lanka transport minister says public can force tuk-tuk fare drop

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ECONOMYNEXT – Sri Lankans can force a drop in tuk-tuk fares by refusing to hire threewheelers to reduce demand, Transport Minister Bandula Gunawardena said, a suggestion that tuk drivers say is nonsensical as they stick to their guns despite a reduction in petrol prices.

Speaking at the weekly cabinet press briefing on Wednesday October 26, Minister Gunawardena said when prices are decided by the market, consumers are the ultimate authority in price control.

“Consumers have the power to revise prices based on their consumption. There was a hike in vegetable and fruit prices recently. There was a drop in buyers and, since vendors are unable to keep non-perishable goods for long, the prices came down,” he said.

“Similarly, if the public can’t afford extreme threewheeler fares, they have the right to be informed, to be protective and to make a choice.”

Earlier in the week, President Ranil Wickremesinghe approved a proposal to increase the weekly fuel quota allocated to threewheeler drivers to 10 litres from the current five-litre limit with effect from November 05.

The first phase of the quota increase will commence in the Western province and threewheel drivers will be required to follow a registration process that will commence on November 01.

The All Island Threewheeler Drivers’ Association, however, is refusing to budge.

The association’s chairman Lalith Dharmasena said his union will not reduce tuk taxi fares despite the doubling of the petrol quota. Their demand is for a weekly quota of at least 30 litres.

Though there have been a reduction in tuk fares overall since the height of Sri Lanka’s fuel crisis, due to increased living costs and spare part prices, fares have remained at a significantly higher level despite the recent drop in petrol prices. Consumers complain that many drivers charge them arbitrarily decided fares, while tuks associated with Dharmasena’s association charges 100 to 140 rupees for the first kilometre and 110 to 130 rupees a kilometre from the second kilometre onwards.

Responding to Minister Gunawardena’s remarks, Dharmasena said the government should appoint a fare revision committee instead of distracting from the issue with what he called ‘crazy talk’. (Dharmasena’s actual words are too colourful for publication).

“[Opposition MP] Kumara Welgama in 2013 was the first person to gazette a fare revision committee. In 2017, [then minister] Nimal Siripala de Silva amended this proposal twice and the gazette which was to be implemented in 2013 was reversed in 2017 and there were no fare review committees after that,” said Dharmasena.

“The National Transport Commission is only in charge of private buses. We have been asking for years for the proposal to be accepted but there has been no response,” he added.

Dharmasena said the income of families of commercial threewheeler drivers has reduced since early this year with people reducing the use of threewheelers for transportation due to inflation hitting everyone hard.

Due to the absence of a fare revision committee, he said, different rates can be seen among tuk drivers, driving consumers further away from the service.

“The government should step in and set a rate, but instead they are making obnoxious statements,” said Dharmasena.

Ride-hailing platforms like Uber and PickMe do not have price issues because they have a set rate that people trust, he added.

Dharmasena also claimed that import controls imposed by the government are useless due to the cut paid by local Uber drivers to the Uber headquarters overseas, which he said is an outflow.

“When things go south because of their own decisions, the government tells the public to reduce threewheeler demand. I’d like to see how they win the election this year,” he said.

“If that’s what a leader is supposed to say, then all I have to say is there are no leaders in the country. Since we gained Independence, we haven’t had leaders. We only had rulers. Not everyone is a leader, because even a shepherd is a leader,” he added.  (Colombo/Oct26/2022)

Comments (4)

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  1. Kaley29 says:

    Developing country or not, I don’t see why any safety-faring citizen should go into these over-prized death traps anyway. The rail services do a higher service, but still cannot get paid at least half of what these Tuks earn (not that they should earn Ofc)
    Reduce the number of three wheels and regulate fares. The drivers should be given some other productive job live city farming.

    1. Diogenes Fernando says:

      Tuk-tuks are in principle an ideal solution for convenient individual urban transport: small, nimble, and cheap to run and maintain…

  2. Kithsiri Perera says:

    Is this not the same guy who said that people can survive with just Rs 2000 per month in Sri Lanka.?

  3. Diogenes Fernando says:

    How about a rigorously enforced regulation requiring tuk-tuk drivers island-wide to install tamper-proof meters…

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Comments (4)

Cancel reply

Your email address will not be published. Required fields are marked *

  1. Kaley29 says:

    Developing country or not, I don’t see why any safety-faring citizen should go into these over-prized death traps anyway. The rail services do a higher service, but still cannot get paid at least half of what these Tuks earn (not that they should earn Ofc)
    Reduce the number of three wheels and regulate fares. The drivers should be given some other productive job live city farming.

    1. Diogenes Fernando says:

      Tuk-tuks are in principle an ideal solution for convenient individual urban transport: small, nimble, and cheap to run and maintain…

  2. Kithsiri Perera says:

    Is this not the same guy who said that people can survive with just Rs 2000 per month in Sri Lanka.?

  3. Diogenes Fernando says:

    How about a rigorously enforced regulation requiring tuk-tuk drivers island-wide to install tamper-proof meters…

Sri Lanka Railways to seek PPPs to boost revenue streams

CURFEW RUSH: Commuters scrambling to get home after curfew was declared in Sri Lanka on March 20, 2020.

ECONOMYNEXT – Sri Lanka Railway department hopes to expand Public Private Partnerships and earn more non-passenger revenues to offset recurring operational costs, an official said.

“For the past 10 years, except the last few years, the Railway operational income only covers around 50 percent of the operational expense of the Department,” the General Manager of the Railway, D.S. Gunasinghe told EconomyNext.

“Our plan is to increase the non-passenger revenue of the Railway department.

“And we cannot expect and do not hope for money from the government.”

Sri Lanka Railways already has agreements with Prima, a food firm, and Insee Cement, which is bringing in additional income, Gunasinghe said.

“We had agreements for material transportation such as sand in the past, however it was canceled but we hope to start it again” he said.

The department will rent out its storage facilities and circuit bungalows for the tourism sector to create additional revenue streams.

Sri Lanka Railways recorded an operating loss of 10.3 billion rupees during 2021, compared to a loss of 10.1 billion rupees in 2020, the Central Bank 2021 annual report showed.

The total revenue of the SLR stood at 2.7 billion rupees, a 41.3 percent drop from a year ago.

(Colombo/ Feb 06/2023)

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Sri Lanka’s doctors distribute anti-tax hike leaflets to train commuters

ECONOMYNEXT – Doctors representing Sri Lanka’s Government Medical Officers Association (GMOA) distributed leaflets outside the Colombo Fort railway station against a progressive tax hike, threatening to address the government in a “language it speaks”.

GMOA Secretary Haritha Aluthge told reporters outside the busy Fort railway station Monday February 06 afternoon that all professional associations have collectively agreed to oppose the personal income tax hike.

“The government is taking a lethargic approach. They cannot keep doing this. They have a responsibility towards the citizens, the country and society,” said Aluthge.

The medical officer claimed that the government was acting arbitrarily (අත්තනෝමතික).

“If it cannot understand the language they’ve been speaking, if the government’s plan is to put all professionals out on the street, if it doesn’t present a solution, all professional unions have decided unanimously to address the government in a language it speaks, ,” he said.

Aluthge and other GMOA members were seen distributing leaflets to commuters leaving the railway station. Doctors in Sri Lanka in general are likely to earn higher salaries than the average train commuter, and a vast majority of Sri Lanka’s population, most of whom take public transport, don’t fall into the government’s new tax bracket. Many doctors, though certainly not all, collect substantial sums of money at the end of every month as doctor’s fees in private consultations.

About two miles away from the doctors, the Ceylon Blank Employees’ Union, too, engaged in a similar distribution leaflet campaign on Monday at the Maradana railway station. A spokesman promised “tough trade union” action if there was no solution offered by next week.

Sri Lanka’s cash-strapped government has imposed a Pay As You Earn (PAYE) tax on all Sri Lankans who earn an income above 100,000 rupees monthly, with the tax rate progressively increasing for higher earners, from 6 percent to 36 percent.

A person who paid a tax of 9,000 rupees on a 400,000 rupee monthly income will now have to pay 70,500 rupees as income tax, the latest data showed. This has triggered a growing wave of anti-government protests mostly organised by public sector trade unions and professional associations.

Even employees of Sri Lanka’s Central Bank recently joined a week-long “black protest” campaign organised by state sector unions against the sharp hike in personal income tax, even as Central Bank Governor Nandalal Weerasinghe said painful measures were needed for the country to recover from its worst currency crisis in decades.

The government, however, defends the tax hike arguing that it is starved for cash as Sri Lanka, still far from a complete recovery, is struggling to make even the most basic payments, to say nothing of the billions needed for public sector salaries.

Economists say Sri Lanka’s bloated public service is a burden for taxpayers in the best of times, and under the present circumstances, it is getting harder and harder to pay salaries and benefits.

Sri Lanka’s new tax regime has both its defenders and detractors. Critics who are opposed to progressive taxation say it serves as a disincentive to industry and capital which can otherwise be invested in growth and employment-generating business ventures. Instead, they call for a flat rate of taxation where everyone is taxed at the same rate, irrespective of income.

Others, however, contend that the new taxes only affect some 10-12 percent of the population and, given the country’s economic situation, is necessary, if not vital, at least for a year or two.

Critics of the protesting workers argue that most of the workers earn high salaries that most ordinary people can only dream of, and, they argue, though there may be some cases where breadwinners could be taxed more equitably, overall, Sri Lanka’s tax rates remain low and are not unfair.  (Colombo/Feb06/2023)

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Sri Lanka bond Yields end steady

ECONOMYNEXT – Sri Lanka’s bond yields closed steady on Monday, dealers said while a guidance peg for interbank transactions remained unchanged.

A bond maturing on 01.07.2025 closed at 32.15/30 percent, steady from Friday’s 32.05/10 percent.

A bond maturing on 01.05.2027 closed at 28.90/29.10, steady from Friday’s 28.90/20.05 percent.

The Central Bank’s guidance peg for interbank US dollar transactions appreciated by one cent to 361.96 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 370.35 rupees on Monday, data showed. (Colombo/Feb 06/2023)

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