A pragmatic step

The recent budget contained a series of measures for developing various sectors. Several tax and duty cuts were also announced. While all these are commendable, we will specifically look at three proposals that will have a major impact on the motoring landscape.

The re-commencement of the duty concession scheme for the import of vehicles by professionals in the Government sector is a step in the right direction. This will add recognition for their efforts to serve the public.

Another very positive step is the 25 percent duty reduction for passenger transport vehicles such as buses and bigger vans. This will make buses even cheaper, as they already do not attract many other taxes as well. The private passenger transport industry is a vital sector of the economy and this step is a big boost. A new Minister has been appointed for this subject, which is another indication that the Government takes it very seriously.

While the cities have a surfeit of buses, it is rural areas that need more buses. The authorities should have a mechanism in place whereby more buses are allocated to rural routes. Even in cities, the bus service is dismal at night.

This is another shortcoming that should be rectified without delay. We hope some of the new buses will help augment the night bus service. The new duty reduction will also help inbound tourism operators in the transport of tourists.

The excise duty and surcharge cut on motor vehicle imports announced in June this year was welcomed by all motorists and the public as it has enabled more people e to purchase new vehicles. Around 10,000 cars have been registered since then, in a record period. The Government's revenue has also drastically increased as a result.

Government has also announced another highly commendable step, which this columnist has always been advocating. The Government plans to remove the Excise duty and VAT on electric and gasoline-electric hybrid cars. This should make their prices really attractive, on top of the duty reductions already announced in June. Since hybrid car makers actually sell their cars at subsidised rates - around US$ 22,000 per unit, the final landed price should be affordable to many.

Hybrids and all-electric cars are the wave of the future. Most countries already grant considerable duty concessions for the import of electric and hybrid vehicles. Moreover, other special concessions are granted for using them, such as the waiver of parking fees and toll fees. For example, London's Congestion Charge does not apply to electric vehicles. The authorities should consider implementing similar measures here.

But why is the Government's move to cut taxes on hybrid cars significant? First, more hybrid cars will mean a saving of fuel as hybrids such as Toyota Prius and Honda Insight do more kilometres per litre than their fossil-fuel only counterparts.

This will translate into a considerable foreign exchange saving in the long term. These cars will be cheaper to run, with less maintenance. Fleet owners including Government departments should consider buying hybrids to effect a fuel - and hence cost - saving. However, the latest hybrid cars require higher and more refined grades of petrol and we hope the authorities will respond accordingly.

The other main beneficiary is Planet Earth itself. These cars have lower greenhouse gas emissions and their impact on the environment is much less severe. Thanks to regenerative braking - in essence, recycling of energy - these cars literally go further than normal cars on the same amount of fuel.

That is another reason why hybrids have to be promoted and their use encouraged. They are also less noisy, which is good news for our cities affected by 'noise pollution' created mainly by traffic and lottery sellers.

In case you thought hybrids are limited to private cars, there are new models of hybrid and electric buses in use overseas. The authorities should seriously consider importing such buses. Plans are already afoot to electrify the railways and this should complement it perfectly. Another option for public transport is Compressed Natural Gas (CNG). This is an ideal alternative fuel for larger vehicles such as buses and trucks. Several cities in other countries already have CNG buses. Our authorities should study this option as well. After all, it might be possible to wean some motorists away from their cars if there is a more comfortable, cleaner public transport alternative.

As for all-electric vehicles, the downside is that they have to be charged overnight, consuming a fair amount of electricity, which in turn might have been generated by fossil fuels. Their range is limited too, but battery technology is advancing all the time. The range should increase a few years down the road. In the meantime, the authorities could consider installing recharge points at key locations for electric cars and motorcycles. This is already seen in miniature at important locations in the form of mobile phone recharge points.

The authorities should also do a re-think on diesel vehicle taxation policies. Their prices did drop in June, but in most countries there is no disparity between the prices of petrol and diesel vehicles.

Today's diesel vehicles are ultra-clean and much more fuel efficient. Kilometre-per-kilometre, diesels easily outperform petrols. In other words, some diesel cars do an amazing 1,000 kilometres on one full tank, whereas a similar-engined petrol car would do around 600 Km. Imagine the savings if most of our cars were diesel-powered, as in Europe and increasingly, India, where taxes on both varieties are more or less equal.

All old arguments against diesel vehicles no longer hold true.

They are generally reviled in this country as an expensive, inefficient and pollution inducing proposition. On the other hand, today's diesel engines are cleaner, more silent, more fuel efficient and more long lasting than ever. What if at least 80 percent of modern vehicles on Sri Lankan roads were diesels and hybrids? One can just imagine the fuel and cost savings. Nevertheless, a start has been made in the right direction and that is a good omen.