Public Transportation 2.0

Nepal’s fledging public transport sector caters to tens of thousands of Nepalese every day. Some new ideas by enterprising youth can change its impression as an untimely, unsafe and outdated services.

Microbuses were introduced in 1998 when the then government made a decree to remove all the outdated buses from Kathmandu. In 1999, owners of the Vikram tempos enjoyed discounts on custom duty while importing new microbuses. There was great jubilation when fleets of these vehicles were paraded in the Valley. While it was a new business venture, many entrepreneurs jumped on the bandwagon. Banks provided loans to these entrepreneurs who saw prospects in this new enterprise. Everything was new and looked good on paper. The bubble burst pretty soon.

Hemanth Raj Angdembay, Head of Consumer Loans at Standard Chartered Bank, Kathmandu says, “SCB earlier provided loans to the microbus entrepreneurs but we have now put it under the risky sector and in fact, it has been six or seven years since we stopped entertaining such provision in our bank.” KIST Bank shares the same story. Many others echo this decision. The reasons for the change in mood and amendment in the banks’ strategy could be credited to the recovery problem and policy change introduced by the state regarding the public transportationsector. As a result, these microbus entrepreneurs now rely on finance companies and cooperative orgnazations. “Even though the interest rates are high (14-20% for finance companies) and (18-20% for cooperatives) microbus entrepreneurs have no alternative,” comments Rajan Rokka, Chairperson of Pashupati Public Microbus Entrepreneurs Association who has 70 microbuses running under his association. “A new microbus costs around 24 to 26 lakhs”, he adds. There are 70 microbuses on four routes under his association. An association like his, of which there are 268 in total, come under the National Federation of Nepal Transport Entrepreneurs (NFNTE), which is again under the Department of Transport Management of the Ministry of Physical Planning, Works and Transport Management.

The new fares are introduced after the proposal is approved by the Ministry of Physical Planning, Works and Transport Management. The Department of Transport Management (DoTM) submits it after discussion with the transport organizations—National Federation of Nepalese Transport Entrepreneurs and the Federation of Truck Tanker and Transport Entrepreneurs. “For a short ride in a microbus, be it any route, commuters have to pay Rs. 15 minimum. The recent 9% increment from the earlier rate was introduced according to a scientific fare determination conducted by the technical committee at DoTM that studied price hike in fuel and non-fuel components including inflation, prices of spare parts, lubricants, tyres and bank interest rates, among others, before suggesting the fare hike to the concerned department.

“Transport fares are reviewed annually as per the scientific fare determination mechanism implemented in 2009”, explains Rokka. In the seemingly lucrative deal, the student concession is posing a problem. 45% discount is offered to students who present their student ID cards. “But the problem is that 90% of the IDs turn out to be fake,” reports one microbus conductor. “On a daily basis we lose Rs. 600-800 because of this,” he adds.

“6-7 lakh motorized vehicles run on the roads of the valley on a daily basis,” says Ashish Gajurel, a transport engineer. Nevertheless, commuters are always crammed into public vehicle. The Motor Vehicles and Transport Management Act 1993 makes it mandatory for public transport entrepreneurs to reserve a certain number of seats for women, the disabled and elderly people. The DIG of Traffic Police blames the insufficient number of vehicles. He knows that even though punishing vehicles for exceeding capacity of passengers has intensified with the Metropolitan Traffic Police Division cracking down on microbuses booking many drivers for rash driving, things will continue downhill. On the contrary Gajurel opines, “We don’t even need to introduce new vehicles to solve the problem. What we need to work on is the system —since there is none.” Entrepreneurs should clearly join hands.

There are many interested candidates who plan to add value to the public transport sector. Media Space Solutions, GalliGalli and ‘Yatayat’ under Monsoon Collective, and some others are working in this sector. “People have always expressed an interest. However, there is a bit of fear and lack of information to enter this sector; people think about unions, bandhs, petrol shortage, strikes ­­— all the negatives immediately; there are strong interest groups and cartels that deter potential entrepreneurs,”explains Abhinab Basnyat, Founding Partner at Biruwa Ventures. Possibly for similar reasons, GalliGalli has kept their project ‘No Tension Sawari’ on hold. Meanwhile, everyone’s money is on ‘Yatayat’ a project under the Monsoon Collective. “There are no maps of buses, microbuses or tempos that take us through the myriads of streets in Kathmandu. Yatayat is a project to produce digital maps of the public transportation system,” explains Prabhas Pokharel about his team’s ambitious project. Leaving the old-school way of asking around, their solution sounds simpler. Yatayat—the Android application is available from Google’s Play store. However, the main interface to yatayat is the website It is not a complete work yet.


Media Space Solutions is a rare success story. They are the advertising company behind installing TVs on microbuses. The commuters are entertained and the entrepreneurs get their returns in terms of the advertisements screened in between entertainment shows.

“In Nepal’s case, there are more entrepreneurship possibilities than in developed countries because the majority here uses public transport which is much cheaper than using taxis and private vehicles. The [public transport] service in Nepal is so bad that people tend to buy private transport although they can hardly afford it. The reasons behind this are unreliability and lack of safety in public transport,” says Ashish.

Also, certain mafia groups are rumored to oversee the workings of the sector. Many microbus entrepreneurs accept the existence and presence of the mafia in the transport business. They are quick to admit that the microbus associations are far from such hanky-panky; however, inappropriate workings go on in the matter of issuing permit routes for the bus service.

Venturing into public transport is not as easy as taking a microbus home, however, if you are the kind who wants to introduce change, then, it could be just the right enterprise for you. One needn’t necessarily buy a microbus to get involved in this sector; there are tens of other ways to break the current impasse. Most importantly public transport should be reliable, safe, and cheaper than using private vehicles. Likewise, the private sector should bring innovative ideas and the government needs to help them with the implementation.

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