Home / Companies / News /  No curbs on Ambassador cabs in West Bengal

Kolkata: Hindustan Motors Ltd (HM) may not have yet upgraded the diesel variant of its iconic Ambassador car to comply with Bharat Stage IV (BS-IV) emission standards, but it has managed to persuade Kolkata’s road transport authorities to bend environment laws to keep the cars alive as taxis on the streets of this city.

The sale of cars not compliant with BS-IV norms was banned in 13 cities, including Kolkata, in 2010 by the petroleum ministry. Over the past two years, the ban has been extended to six more cities.

A BS-III compliant car emits at least 30% more air pollutants than one that complies with the BS-IV standards, according to S.N. Ghosh, an environmentalist and one of the oldest campaigners against vehicular pollution in Kolkata.

Yet, the Ambassador, which largely serves as taxis and runs on diesel, wasn’t banished from Kolkata, with the state government putting off the implementation of the ban, citing the inability of manufacturers to meet the demand for BS-IV vehicles.

The sole beneficiary of the government’s move is Hindustan Motors.

What is more, the state government of West Bengal, where the car is produced, continues to provide financial incentives for taxi operators to remain loyal to the Ambassador.

Not surprisingly, the HM-made curvy yellow Amabassador taxi remains an enduring symbol of Kolkata.

Under a six-month facility launched in August, road transport authorities in Kolkata have been allowing taxi operators to replace ageing cabs with new Ambassadors, treating it as a “special case".

At least 3,000 taxis, aged above 15 years, will get replaced by new ones—the diesel variant of the Ambassador—under this facility, say transport department officials.

To give the Ambassador a fresh lease of life beyond these six months, HM is preparing to launch a BS-IV compliant diesel variant early next year. The company is developing it jointly with a foreign partner, HM’s managing director Uttam Bose said, while refusing to name the collaborator.

BS-III compliant Ambassador cabs are being allowed registration in the metropolitan area of Kolkata because upgraded variants of the car are not immediately available, said B.P. Gopalika, principal secretary in the state’s transport department.

“We couldn’t snatch the livelihood of so many people," he added, referring to Kolkata’s taxi operators, who remain loyal to the Ambassador.

The state government has been illegally protecting the interest of “a local car maker" without caring for pollution, said Subhas Dutta, a Kolkata-based environmentalist and legal activist.

West Bengal provides a cash subsidy of 25,000 when an Ambassador is bought to serve as a so-called meter taxi. The state also waives the road tax for the first year to encourage taxi operators to retire cars aged 15 years and more. The cost of a 1.5 litre diesel Ambassador is around 4.5 lakh.

Besides these incentives, HM pays 50,000 for an old Ambassador cab if replaced with a new one, making it almost impossible for competing cars such as Maruti Suzuki India Ltd’s WagonR and Tata Motors Ltd’s Indigo to break the Ambassador’s stranglehold over Kolkata’s meter taxi market. The WagonR and the Indigo are the only two cars, apart from the Ambassador, which are allowed to serve as meter taxis in West Bengal. The WagonR has found no takers, while a few Indigo taxis were launched in the past two years.

Kolkata, where almost all commercial vehicles run on diesel, has some 35,000 Ambassador taxis.

The Ambassador is manufactured only at HM’s Uttarpara factory, 10km from the fringes of Kolkata. It has around 3,000 employees, according to a spokesperson for the company, and the Ambassador accounts for 90% of the revenue earned from vehicles manufactured at Uttarpara, he said.

The company has a capacity to manufacture up to 1,000 Ambassadors a month at its Uttarpara factory, but currently produces only 250-300. At least half of them end up on Kolkata’s roads as meter taxis, while the rest go to institutional customers such as governments and the armed forces, the spokesperson added.

To be sure, HM has already upgraded the petrol, liquefied petroleum gas and compressed natural gas variants of the Ambassador to comply with BS-IV standards, but sales of these models are insignificant when compared with the diesel variant.

To be sure, West Bengal’s moves may be motivated by a desire to ensure the livelihood of the people who work at HM’s Uttarpara factory. The factory could face closure if the company is forced to suspend production of the Ambassador, or so feared the state government, show internal notes of the transport department that have been reviewed by Mint.

For instance, in a note in September 2010, the then principal secretary of the transport department, Sumantra Choudhury, said that operations at HM’s Uttarpara factory would be impacted if the law banning BS-III complaint cars from metropolitan cities was implemented in Kolkata.

To circumvent the law, he suggested that Ambassador cabs be granted registration outside the metropolitan area of Kolkata, but allowed to ply in the city and its suburbs without having to pay any extra fee.

Choudhury suggested this as a temporary measure to give HM time—around three months, according to the note from September 2010—to launch a BS-IV compliant diesel variant of the Ambassador by January 2011.

In October 2010, when the WagonR and the Indigo were allowed to serve as meter taxis in Kolkata, Choudhury wrote in another note that the category was almost always reserved for the Ambassador “as a policy of the state government" so that HM could run its Uttarpara factory “properly" without having to retrench people.


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