Transport workers to protest today against 3rd party insurance

Making third party insurance compulsory will hit State road transport undertakings hard given that they are already reeling under losses, say road transport workers’ union.

Opposing this and some other proposals under the Motor Vehicle Amendment Bill 2017, the road transport workers union will be protesting across the country on Tuesday.

Buses owned by State road transport undertakings will be mandated to have third party insurance, but vehicles owned by the Central government are exempted from this requirement, as per the proposed Motor Vehicle Amendment Bill 2017.

According to All India Coordination Committee of Transportation Workers (AICTW), transport workers who will participate in the protest include those driving autorickshaws, cabs, trucks, private buses and State road transport undertakings.

The Motor Vehicle Amendment Bill, 2017 is pending approval in the Rajya Sabha.

Currently third party insurance is not mandated for vehicles of State-owned corporations. Given that drivers of State owned transport buses are usually safer, R Lakshmaiah, Deputy General Secretary, All India Road Transport Workers’ Federation (AIRTWF), told BusinessLine that if this clause is implemented, the insurance premium charges of bus transport undertakings will go up exponentially.

Compensation, premium

“Accident compensation, roughly ₹1-2 crore a year, is paid from the corporation fund. If the third party insurance comes into force, insurance premium will touch ₹50-100 crore for every State transport company,” said Lakshmaiah.

That Central government-owned vehicles are exempt from compulsory third party insurance makes the proposal unfair for State-owned transport firms, he added.

“One of the main aims of the amendment is to reduce road accidents, and State road transport undertakings are one of the safest units from an accident perspective. However, the provisions of the amendment would drive State road transport undertakings (SRTUs) to close down,” Lakshmaiah, added.

SP Singh, Senior Fellow at the Indian Foundation of Transport Research and Training, suggested an option for State road transport undertakings to ease the burden of insurance claims.

“There is an option for State road transport undertakings to form an insurance pool by levying a small tariff on their fares. This will insulate them from potential sharp increase in insurance payments,” he said, adding that several large firms who move freight using trucks use such pools to take care of damages in case of accidents.

Route liberalisation

Workers are also opposing liberalisation of transport service routes. The workers feel that the proposed norms will effectively dilute the difference between contract carriage and stage carriages — which are two different types of transport licences issued by State governments.

Also, the proposal to do away with a license to operate on specific routes will further push the State road transport undertakings towards operating only in non-profitable routes.

On this, Singh pointed out that several State governments, particularly in the North, are already on the path of privatisation by asking private operators to run on routes.

However, States — particularly in the South, who have good public transport — would want to control the extent and pace of inducting private operators in the transportation space.

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