In such a difficult situation, construction entrepreneurs complain that despite repeated requests from the government to make arrangements for price adjustments in all types of contracts, the problem has not been resolved.
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The Federation of Nepalese Chambers of Commerce and Industry, Confederation of Nepalese Industries and Nepal Chamber of Commerce, private sector umbrella organizations, have urged for price adjustment, saying that the high price increase of construction materials is making it difficult to carry out development and construction works in the country. They have also mentioned that they are in solidarity with the demands being raised by construction entrepreneurs.
‘The Federation has drawn serious attention to the situation in which the construction industry, which is the backbone of the country’s economic activities and infrastructure development, is currently going through a serious crisis due to the unexpected and excessive price increase in fuel and construction materials,’ the statement issued by the Federation said. ‘The Federation expresses its full solidarity with the extreme financial and mental pressure faced by construction entrepreneurs in this difficult situation.’
The Federation has made it clear that it is concerned about the information provided by the Federation of Nepalese Construction Entrepreneurs that the construction industry has come to a standstill due to the high increase in the cost of construction materials and transportation, including diesel, kerosene, bitumen, used in the construction industry. The federation says that the government should take seriously the federation's statement that construction entrepreneurs alone have suffered losses of more than 10 billion during this period of price hike.
'As construction projects are affected, other industries directly related to them may also suffer, so the federation requests all parties concerned to properly address the problems of construction entrepreneurs to reduce the financial and mental pressure on construction entrepreneurs and to make the overall economy dynamic,' the statement said.
The construction industry, which plays an important role in making the country's economic activities dynamic, directly and indirectly employs more than 2 million people, the federation said. 'The construction industry, which is also an industry that spends nearly 80 percent of the government's capital expenditure budget, has come to a standstill due to the recent unexpected and excessive price hike in fuel and construction materials, disrupting the supply chain and causing the construction industry to collapse, adversely affecting the overall economy of the country,' the statement issued by the federation states.
In such a difficult situation, the Federation of Construction Entrepreneurs has repeatedly requested the government to make arrangements for price adjustment in all types of contracts, but construction entrepreneurs complain that the problem has not been resolved.
The Federation has also reminded the government of the mandatory legal provision for price adjustment as per Section 55 of the Public Procurement Act, 2063.
The Chamber has also urged the government to resolve the problem related to the construction sector. ‘Construction entrepreneurs are in financial crisis due to the continuous increase in prices of construction materials, diesel and transportation costs due to the impact of the ongoing tension in West Asia,’ the press release issued by the Chamber said. ‘The problem has worsened as the provisions of price adjustment provided in the Public Procurement Act and Regulations have not been implemented effectively.’
The Chamber understands that development and construction work has been affected due to cost increase, non-payment on time and administrative hassles. It is said that this has also affected other construction-related businesses including cement, steel, dandi, pipe and wire industries.
The Chamber urges the government to immediately implement the necessary policies and decisions to prevent the construction sector from falling into further crisis. The Chamber has suggested the government to formulate a long-term plan by prioritizing roads, energy, water resources, urban development and industrial infrastructure.
