Government Implements ‘Emergency Brake’ on Public Vehicle Registration, Stakeholders Express Uncertainty

May 21, Kathmandu – The government has enacted an ‘emergency brake’ on the registration of public vehicles.

On Thursday, the Department of Transport Management issued letters to all provincial ministries and local governments instructing them to stop vehicle registrations.

According to the department, under the Vehicle and Transport Management Act of 1992 (2049 BS), the department is authorized to halt registration of any vehicle for reasons including environmental pollution, vehicle congestion, poor road conditions, difficulties in transit, or other public interests.

In the letter signed by Department Director Mani Ram Bhusal, two main reasons are cited. First, “Due to the lack of scientific management in public transportation, severe air pollution, congestion, and traffic jams have increased, causing difficulties in mobility.”

Second, “The rise in fuel prices has created hardships in public transport, necessitating proper management of public vehicles.”

The government has also halted registration of domestically produced electric vehicles, citing fuel price increases, although further details have not been clarified.

Ram Hari Pokharel, spokesperson for the Ministry of Infrastructure Development, expressed that the decision was made by the department and that he had not yet received formal notification. Attempts to reach senior department officials were unsuccessful.

Saroj Sitoula, President of the Nepal National Transport Entrepreneurs Federation, said the decision was made abruptly without prior discussion or preparations. He described it as an “emergency brake.”

“There have been ongoing discussions in various stages with the Prime Minister’s Office and the Ministry of Transport regarding many issues and the need for improvements in public transportation, but suddenly an order came to halt registrations,” he said. “For now, we plan to take this positively and await the government’s next steps.”

The department has stated that the registration halt is indefinite and will remain in effect until further notice.

“Thousands of buses are currently in the pipeline, many are under construction in garages, and some are in the process of being imported,” Sitoula noted. “If the halt extends for a long period, it will have significant impacts.”

However, he said the move will help address irregularities in public transportation and that entrepreneurs fully support the decision.

“Even vehicles with red license plates have been misused; some public transport vehicles have been used to carry goods,” he explained. “Since there is no accurate data about which vehicles are registered for what purposes, temporarily halting registration is a positive step.”

Highlighting the lack of reliable data, Sitoula emphasized the need to install an electronic tracking system to properly regulate public transport.

“There is no updated record even at the department of how many vehicles exist nationwide and what purposes they serve. Without organizing this, public transport management cannot be effective,” he added.

Chamber Criticizes the Decision

The Nepal Chamber of Commerce expressed serious concerns regarding the decision to halt registration of new public vehicles.

In a statement issued Friday, the chamber pointed out that the Department of Transport Management halted registrations of all public vehicles, including electric ones, until further notice with the stated goal of scientific management, but this has placed automobile entrepreneurs at significant financial risk.

While welcoming the government’s policy to make public transport management scientific, organized, and long-term, the chamber criticized the decision to halt registrations without prior notice, discussion, or coordination with entrepreneurs as impractical.

The statement further explained that hundreds of vehicles imported through letters of credit financed by banks and financial institutions are awaiting customs clearance and registration. Some are in transit, and others are already manufactured and dispatched by producers. The sudden halt has put these investments at risk.

The chamber warned that these vehicles, imported specifically for public transport, cannot be sold or used in other sectors, placing entrepreneurs in serious financial difficulty.

The decision may also negatively affect the credibility of Nepali entrepreneurs with international manufacturers, as it sends a negative signal concerning Nepal’s business environment.

The chamber recalled that sudden import restrictions on vehicles during the COVID-19 pandemic had already damaged Nepali entrepreneurs’ international reputation, and expressed concern that the current decision may have similar adverse effects.

The chamber urged the government to reconsider the decision immediately, citing possible negative impacts on public transport services, employment, the automotive industry, banking sector investments, and government revenue collection.

Chamber President Kamlesh Kumar Agrawal requested facilitation for registration and operation of vehicles currently in the process of registration, in transit, or imported under prior approval.

He also called for the adoption of a practical, scientific, and long-term policy developed through coordination and consultation with the private sector and relevant stakeholders.