A federal government directive suspending the registration of new public transport vehicles across Nepal has triggered criticism from transport operators and exposed growing tensions between federal and provincial authorities.

On May 21, the Department of Transport Management instructed provincial transport ministries and transport offices not to register new public transport vehicles. Following the circular, all provinces except Bagmati halted registrations.

Transport offices under Bagmati Province’s Ministry of Labour, Employment and Transport have continued registering new public transport vehicles, disregarding the federal directive. Other provinces have complied with the order and suspended registrations.

In its circular, the department said the temporary suspension was necessary to address worsening air pollution, rising fuel prices and growing traffic congestion. More than three weeks after the decision, the restriction remains in place with no indication of when registrations will resume.

“There has been no decision yet to reopen registrations,” said Maniram Bhusal, a director at the Department of Transport Management. “The Ministry of Infrastructure Development will ultimately decide the matter.”

Khagendra Paudel, an official at Bagmati Province’s Ministry of Labour, Employment and Transport, said the ministry had received the department’s directive and was studying the issue.

“We received numerous complaints from transport entrepreneurs and vehicle buyers whose vehicles had already been imported and whose VAT invoices had already been issued,” Paudel said. “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.”

According to Paudel, the province decided not to enforce the suspension until political and administrative leaders at both levels of government reach a common understanding and issue a unified directive.

“If further decisions are made later, we will act accordingly. For now, registrations of new public transport vehicles are continuing as normal,” he said.

Transport operators argue that the government’s decision is unjustified and has created uncertainty for businesses that have already invested heavily in new vehicles.

Saroj Sitaula, president of the Federation of Nepalese National Transport Entrepreneurs, said many imported public transport vehicles that have already cleared customs remain idle because they cannot be registered.

“This has become a serious problem,” Sitaula said. “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.”

He said registrations should be reopened nationwide rather than in only one province.

“Many entrepreneurs purchased vehicles through bank loans, and those vehicles are now sitting unused,” he said. “If they cannot be registered and operated on time, businesses face financial losses while loan repayments continue. We plan to meet department officials within the next few days.”

The NADA Automobiles Association of Nepal has also questioned the rationale behind the suspension, saying the government has yet to clearly explain its decision.

NADA president Surendra Kumar Uprety said the restriction could remain in place for some time while authorities prepare new standards for public transport operations.

“The department has told us it is developing guidelines for public transport management,” Uprety said. “Discussions will be held with stakeholders once those standards are finalised.”

According to Uprety, officials have indicated that the new framework is intended to address long-standing problems in the public transport sector through a more scientific and systematic approach.

In the circular sent to provincial ministries, the Department of Transport Management argued that poor management of public transport services has contributed to rising air pollution, increased traffic volumes and worsening congestion, making travel more difficult.

The department also cited the growing burden of fuel costs, saying more effective management of public transport is needed to address challenges facing the transport sector.

To achieve what it described as “scientific management” of public transport, the department said registrations under Section 14 of the Transport Management Act, 1993, should be suspended until further notice. The directive instructed provincial offices and local governments to stop registering all public transport vehicles.

The inclusion of electric public transport vehicles has further fuelled criticism of the policy. Officials justified the registration freeze on grounds of rising fuel costs and air pollution, despite the fact that electric vehicles were also covered by the order.

Government data show that 281,921 vehicles, including buses, minibuses, trucks, microbuses, cars and motorcycles, were registered during the first eight months of the current fiscal year through mid-March. According to the Economic Survey 2024-25, Nepal had 6.25 million registered vehicles by mid-March.

Officials say the rapid increase in vehicle numbers has added pressure to the transport system and prompted the temporary freeze while a new management framework is developed.

Ramhari Pokharel, joint secretary and spokesperson for the Ministry of Infrastructure Development, said no final decision has yet been made.

“We are working on a plan to organise and better manage public transport before reopening registrations,” he said.