Commendable moves

The Government's recent decision to impose a two-year limit on the import of cars used abroad (mostly in Japan, UK and Singapore) is a step in the right direction.

This columnist has argued for years that the import of reconditioned cars (a glorified term for used cars) must eventually be stopped. The ideal goal is to allow the import of brand new cars only at some point in the future.

So-called reconditioned cars have been used in another country for three or more years and are not in the best mechanical condition. Worse, some of them are imported in an as-is condition, without any modifications or repairs.

The earlier limit used to be three and a half years and we hope that in the next revision of car import policies, an 18 month or one year limit would be imposed. Several countries in our region, including Bangladesh, have taken similar steps. It was not immediately clear whether the two-year limit is for petrol engined cars only or whether it applies to diesel vehicles as well. The time limit should apply to all vehicles, irrespective of fuel type.

But we have to look at the prime reason for buyers' propensity for reconditioned cars brand new cars are more expensive.

True, the duty changes made in June last year led to a drastic drop in new car prices but there is still a considerable difference in prices of new and used cars for the same engine capacity. The only solution is to alter the duty structure in such a manner that reconditioned cars are no longer attractive from a purely price perspective. In other words, the phasing out of recon cars should be done in tandem with a further duty or tax reduction on brand new cars.

Why are reconditioned cars not such a good idea, especially for a developing country? Remember, these cars are already several years old. Worse, there is an unhealthy trade in used spare parts for these vehicles, which incurs a massive amount of foreign exchange. On the other hand, brand new cars are much more environmentally friendly and do not require major repairs or spare parts for at least for 5-6 years unless they are involved in accidents.

Another aspect is that reconditioned car sales as they are widely known take up a lot of prime real estate all over the country. Some cars remain unsold for months, even years at these sales lots. This is a terrible waste of foreign exchange, because the sellers have to wait for buyers to come in after importing the cars.

There is no guarantee of a concrete sale. Such prime real estate can thus be used for another more productive commercial purpose, perhaps even by the same companies. And car sales centre generate hardly any employment we often find only one or two persons manning these establishments.

On the other hand, importers of brand new cars have only a couple of cars in their showrooms at any given time and cars are imported only on customer orders and specifications.

This way, the foreign exchange as well as the duties and taxes are properly accounted for prior to the car being ordered. There is no waste of foreign exchange in this process. This does not mean that independent car sale companies have to go out of business; they too can import brand new cars at competitive prices.

The Government should also consider the possibility of an incentive programme for the removal of old bangers from our roads, those really old vehicles which are not in a sound mechanical condition. (There are some old vehicles which defy this norm). another proposal worthy of consideration, which I saw some time back in a trade magazine, is to check on the possibility of exporting our used cars to certain African countries. This will give us an opportunity to dispose of such cars without keeping them here until they run to the ground.

There has been some criticism about the Government's move to raise duties on three wheelers to 50 per cent from 38 per cent. However, this move makes sense in every way. Granted, three wheelers do provide employment and self-employment to a large number of people. But we are in danger of three wheeler saturation, because there is such a large number of them at present that most are idling at any given time.

This negates the very purpose for which they are being promoted as an avenue of employment and a transport solution. And more are being added to the fleet.

The duty increase will hopefully put a lid on this rapid increase in three wheeler numbers.

Most other developing countries are actually restricting the import, manufacture and use of three wheelers. In Thailand, three wheelers are fading away in favour of conventional taxis.

Three wheelers are banned in certain congested areas of New Delhi. Some developing countries such as Malaysia simply do not allow the import of three wheelers. We should also move in the direction of expanding the conventional (car) taxi services, while enabling more three wheeler drivers to migrate to that sector. However, ensuring their discipline is another matter altogether.

The ultimate question is, 50 years from now, should we still have three wheelers buzzing about? That would not look like the situation in a developed country.

Sri Lanka does need a reliable taxi service. There are a few radio taxi services, but they can never match the level of a good taxi service as seen in Singapore, Tokyo, London or New York. Sri Lanka needs an efficient, frequent, reliable and above all, affordable islandwide four-wheeled metered taxi service.

It should be as simple as hailing one on the street- just as with three wheelers today. And why not have separate taxi stands too for such services ?

Of course, the best solution is a reliable, comfortable, efficient, clean and fully integrated public transport system that would induce more people to leave their cars at home, significantly reducing car usage while helping the environment.