Cable Car Statism

One of the most successful private enterprises in the last twenty years, aside from the mushrooming banking industry, has been the Manakamana Cable Car service run by the Chitwan Co-E. It is exactly the kind of innovative, technological and social model of development that Nepal needs. While the political instability has taken a periodic toll on the cable car's business model, over the years the company and its operations has been wildly successful. Millions of Nepali and foreign travelers have enjoyed riding on Nepal's only cable car to pay a visit to the Manakamana temple. Although, I haven't been able to find any study of the project's impact, surely, the local economy of both Kurintar, Manakamana and the surrounding areas have seen the positive effects of the cable car. Not only does the service promote tourism but also enhances the economic benefits to the region.

So it is especially maddening to read (sorry, can't find the news link now) about the bureaucratic red tape faced by a new request made by Chitwan Co-E to build a new cable car operation in Pokhara. The request has to first go through the Ministry of Development, which formed a committee to decide if it was a good idea. After their prolonged preliminary report is completed, the request is passed on to the National Planning Commission which again forms its own committee to give its blessing before the project is finally approved by the government.

In a country where nothing moves without government meddling, this is a clear example of such practice. The fact is that neither the ministry engineers nor the planning commissioners have any experience building, running and maintaining a cable car operation. So why do they have to take such a long time and make the company, which has the experience, know-how and the will, to jump through hoops just to get their project approved? 

Another fact that is so bothersome is why does the company have to go the central ministry and the planning commission for approval? If the project is to be built in Pokhara, shouldn't the local municipality or the district government be given enough jurisdiction to decide on the request to build in their town? If there is one thing that a smartly designed federalism can do, it is to provide just such a jurisdiction to decide on the local level without having to go back to the center for any little agenda. The costs of the top-down governmental, social and economic structure of the Nepal is apparent with examples of state-overreach like these.

This case of Chitwan Co-E is just a minor example of the state hindering the widely beneficial economic activity by the private sector. One hopes that when the whole rigmarole of the current crisis is over and the constituent assembly finally gets down to drafting a new constitution, a federalism based on economic viability forms the core of new Nepal.