Dr Mohammed bin Ali Al Kubaisi
In its regular meeting on April 12, 2013, the Council of Ministers approved the draft law submitted by Mowasalat Transport Company, which has imposed a bill on the state, amending some provisions of Decree Law No 37 of 2004 by granting the transport company (QSC government-owned) franchise management and taxi operation known as “Karwa”.
The amendment said: “The state may grant the company an annual financial support from the State Treasury to cover the difference between the actual cost incurred by the company to serve the public transport and what the public pays for this service.”
Of course, as soon as the bill arrived at the Shura Council it was approved! This raises two questions, is “Karwa” qualified to have this monopoly? Is “Karwa” actually suffering from losses to ask for financial support from
the state?
To answer the first question, monopolising in any country is subject to three combined conditions. These are: the service must cover the entire market or more, the service provided must be of the same or better quality in similar states, and the price required to provide the service must be the same or less than the price of a similar service in other states.
I will analyse the availability of these conditions, but I will leave it up to the reader to compare the real situation in front of him.
The answer to the second question, “Karwa” has adopted some new innovative ways to get rid of expenses and reaping high profits by renting cars from Qatari dealerships that must ensure the operability of the leased car or otherwise replace it. Then, “Karwa” leases those cars to expatriates who are working as drivers under its sponsorship.
Monopoly in any economy is a situation where the market is available to only one company that provides a specific service to all consumers. In other words, this is the only company that is controlling the entire market.
In this case, the company can impose its prices at will because there are no rival companies.
The monopoly of the transport company led to poor service, charging of unreasonable prices, and taking advantage of its exclusivity in the market.
It is important that other companies are given the chance to enter the transportation market without Karwa’s domination, so as to create fair competition, and provide better services and reasonable prices, which will encourage a lot of people to use this service by driving their cars for personal use rather than driving to work, which will lead to less congestion on the streets and could end the parking crisis.
Monopoly abolition has become a necessity and must be replaced by an organisational unit at the Ministry of Communications (with great reservation) to supervise the transport sector, with the assurance that companies that will enter this activity, directly or through brokers from the community, show the path of specific lines it is willing to cover by noting attractions such as ministries, hospitals and shopping malls, and sketches of transport stations.
The vehicles must be air-conditioned, and to include passenger comfort and safety, trip information and Internet service. The size of stops that will be allocated to the main station and branches of the “stop-and-ride” system, the types of shops at the main station and how to lease them, the size of alternative energy that can be used at the main station and branches.
In conclusion, the abolition of the monopoly in the transport sector will provide promising opportunities for young entrepreneurs, through the direct exercise of transport or other supporting activities, including, but not limited to, retail and service shops in wait stations, quick maintenance service centres, and spare parts sales to be distributed to areas where there are no shops or services.
The demise of the monopoly or at least the suffering imposed by the existing service must end.
