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Transporters' strike: Govt talks tough, not to roll back diesel price hike

Prime Minister A B Vajpayee has ruled out the possibility of rolling back the diesel price hike.

Vajpayee said the government has not taken any decision to roll back the diesel price hike. ''There is no proposal to change the 35 per cent hike.''

Supplies of essentials maintained

The Centre tonight said supplies of essential commodities were being maintained in most parts of the country despite the indefinite strike called by the All India Motor Transport Congress demanding withdrawal of the diesel price hike.

The strike did not have much impact in several states as light commercial vehicles and tractor trolleys were being used to transport essential items to meet the situation arising from the truck operators agitation, a spokesman of the surface transport ministry said.

The ministry had asked the state governments to take measures to ensure supply of foodgrains and other items of daily needs. The railways were also pitching in to meet the situation.

Sources in the ministry, however, said the impact of the strike would be felt if it continued.

Long queues of trucks lazed near roadside eateries and petrol bunks as truckers across the country went off the roads ''indefinitely'' from Thursday morning.

Official reports from fourteen states, Chandigarh and Pondicherry were received in New Delhi, but only Bihar and Gujarat spoke of a poor response to the strike. Various transport associations extended support to the strike called by the All India Motor Transport Congress in Madhya Pradesh, Kerala, UP, Maharashtra and other states.

Strike evokes 'modest' response at some places, but prices soar

The Indian Foundation of Transport Research and Training said the strike call had evoked a ''modest response'', but added that any assessment of its impact would be possible only on Saturday. Milk, water and newspapers have been exempted from the strike.

Prices of vegetables have already shot up in Tamil Nadu. Kerala, which is heavily dependent on other states for the flow of essential items, was expected to suffer badly as the strike was ''near total'' there.

The Delhi Exporters' Association said in a press statement that the strike would hit exports as shipments from upcountry areas to ports get held up. About 5,000 trucks were used every day to carry exporters' goods, it said, demanding the use of army trucks to carry the held up cargo.

The strike is also expected to affect the movement of raw materials to small-scale industrial units. Agarwal, meanwhile, claimed the strike entailed a national loss of Rs 80 billion daily.

In Orissa, where private bus operators also are on strike since October 14, the government invoked the National Security Act today against the truckers. More than 35,000 trucks in the state had joined the strike, affecting movement of essential items.

Orissa Transport Secretary J Singh said the impact of the strike would be felt only after two days. The civil supplies department was stocking essential commodities, he said.

Contingency plans had been prepared in other states also.

In Gujarat, the government had invoked the Essential Services Maintenance Act, but the strike call had not had any major impact as yet. State Transport Secretary J S Rana said the transporters' local association was not actively supporting the strike.

Nitish Kumar will talk 'if the need arises'

More than two million truckers stayed off the highways for the second day today.

Surface Transport Minister Nitish Kumar said the government would not scale down the 35 per cent increase in diesel prices and urged the truckers to call off the strike.

Talks are going on with the officials. "We are trying to convince them about the price increase," Kumar told Doordarshan.

"Diesel prices cannot be reduced. I shall talk to them if the need arises," he said.

But the All India Motor Transport Congress, which represents 32 national cargo haulers' unions, said the strike would continue.

"The government position is not clear. They have not got back to us for talks. We will continue the agitation," Om Prakash Agarwal, chief of the Transport Congress, was quoted by news agencies as saying.

Agarwal said more than 2.2 million trucks would "not run until the diesel price is rolled back."

Government officials, however, played down the strike and said it had a partial impact. "It is a partial strike.

"There were no talks with the All India Motor Transport Congress. What is there to talk?" a senior official in the transport ministry asked.

The truckers' strike sparked panic buying of essentials and officials said the real impact would be felt in a "day or two."

Newspapers said prices of fruits and vegetables shot up by 10 per cent to 15 per cent.

Truck finance companies may feel the pinch: CRISIL

The diesel price hike will adversely impact the operating surplus of truck operators, according to the Credit Rating and Information Services of India Limited.

The ability of operators to fully pass on the impact of increase in fuel cost is constrained by the prevailing demand-supply dynamics in the trucking market, CRISIL felt.

The rating agency believes that at least over the next 3-6 months, repayment behaviour of truck operators would get impacted due to higher operating costs. Exercising control over potential delinquencies would therefore be a challenge for truck finance companies and would be a key rating sensitivity. Further, the projections on growth in business and profitability would also need to be reviewed in light of the above.

CRISIL expects challenging times ahead for finance companies with significant exposure to the commercial vehicles segment.

CRISIL believes that the likely impairment of repayment behaviour of truck operators would get reflected in collection efficiency of truck finance companies and their projections related to business growth and profitability would need to be reviewed.

The truck operators' ability to honour their obligations is driven centrally by utilisation of assets and control over operating costs.

Over the past couple of years, the slowdown in industrial activity had resulted in declining load factor besides a gradual build up of overcapacity situation in trucking market, which have led to softening of freight rates.

However, over the past six months, the freight rates have remained stable, supported largely by buoyancy in agricultural activity and improvement in performance of some of the commodity industries.

An expectation of sustainability of the ongoing trend in industrial activity coupled with availability of finance at competitive rates has provided a filip to offtake of new vehicles during the last six months.

CRISIL, however, believes that overcapacity situation in the trucking industry would remain critical to performance of truck finance companies.

UNI

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