Public transport registration freeze exposes federal-provincial standoff in Nepal

A federal government order to halt new public transport vehicle registrations has sparked criticism from operators and highlighted a growing rift between federal and provincial authorities in Nepal. The Department of Transport Management issued a directive on May 21, instructing provincial transport ministries and offices to cease registrations.

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There has been no decision yet to reopen registrations. The Ministry of Infrastructure Development will ultimately decide the matter.

Most provinces have complied with the order, but transport offices under Bagmati Province’s Ministry of Labour, Employment and Transport have continued registering vehicles, creating a significant standoff. The federal department cited worsening air pollution, rising fuel prices, and increasing traffic congestion as reasons for the temporary suspension.

Transport operators argue the decision is unjustified and has created business uncertainty. Saroj Sitaula, president of the Federation of Nepalese National Transport Entrepreneurs, stated that many imported vehicles cleared through customs are now idle, awaiting registration. He criticized the lack of meaningful discussion with the government and called for a nationwide reopening of registrations rather than a provincial exception.

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We received numerous complaints from transport entrepreneurs and vehicle buyers whose vehicles had already been imported and whose VAT invoices had already been issued. Transport operators formally submitted their concerns to the ministry. Transport offices have been instructed to continue registrations until a decision is reached through coordination between the federal and provincial governments.

Khagendra Paudel, an official from Bagmati Province’s ministry, explained that they are studying the issue and have received numerous complaints from entrepreneurs and buyers whose vehicles were already imported and paid for. The province decided to continue registrations until a unified directive is issued through federal-provincial coordination. The Department of Transport Management confirmed that no decision has been made yet regarding the reopening of registrations, with the Ministry of Infrastructure Development holding the ultimate decision-making power.

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This has become a serious problem. There has been no meaningful discussion with either the Ministry of Infrastructure Development or the Department of Transport Management. We do not know what will happen to vehicles that have already been brought into Nepal. The government has still not explained why it imposed the restriction.