Construction Sector Faces Crisis Due to Price Hikes; Industry Demands Government Declare ‘Emergency’
March 12, Dhangadhi – The Kailali Construction Business Association has called on the government to declare an ’emergency’ in the construction industry, warning that soaring prices of fuel-based and construction materials have brought the sector to a standstill. At a press conference held on Saturday in Dhangadhi, the association highlighted that the ongoing conflict in the Middle East has caused repeated, unexpected spikes in diesel, petrol, kerosene, and other fuel-related product costs, severely impacting the construction sector.
Association President Tek Bahadur Mall stated that along with fuel, continuous price increases and shortages in essential construction materials such as bitumen, cement, and steel rods have pushed the construction industry to a critical point. The press conference also noted that challenges within the crusher industry have further exacerbated the difficulties faced by the construction sector. Despite repeated appeals by the Nepal Construction Business Federation to the government and relevant authorities, no concrete resolutions have yet been made to address these issues, the association emphasized.
Prakash Sethi, Central Vice President of the Construction Business Federation (Sudurpaschim Province), explained that although construction cost adjustments are supposed to follow the Nepal Rastra Bank’s price index, the steep rise in market prices for construction materials has not been reflected in the index, further burdening businesses. He urged the government to take proactive measures to resolve the problems construction businesses are facing. The association stressed that during this peak construction period, the rising fuel and material prices are imposing significant financial strain on businesses, and therefore they strongly demand the government declare an ’emergency’ in the construction sector to provide relief.
Moreover, they appealed to the government to immediately issue Price Adjustment Guideline-2 since current legal provisions do not allow price adjustments according to real price increases in each project, and to apply these adjustments across all contract periods.