Rising Costs Threaten Construction Projects

Sabika Shrestha/Pawan Barsha

In the Nepali market, consumers, traders and even government agencies often do not know why the prices of various goods increase. From daily consumer goods to construction and development materials, there is no clear explanation for the price hikes. Construction entrepreneurs have also been facing the same problem recently.

Construction material prices in Nepal have surged, with both imported and locally produced materials becoming increasingly expensive.

The rising costs are putting pressure on construction projects, with entrepreneurs warning that repeated price hikes are affecting project implementation and contributing to delays.

The prices of almost all construction materials in the Nepali market are currently increasing day by day. Construction entrepreneurs say that bitumen, which was available for up to Rs. 85 which is equivalent to 0.56 USD per kilogram a year ago, now costs between Rs. 133 which is 0.88USD and Rs. 155 WHICH IS AROUND 1.02USD per kilogram in the market.

The price of domestically produced construction materials, including cement, steel rods, gravel, sand and bricks, has also increased by Rs. 8 i.e.0.053 USD to Rs. 12 i.e. 0.079 USD per kilogram within a year.

Construction entrepreneurs say it is understandable that rising petroleum prices would affect imported materials, but repeated and unexplained price increases in domestically produced materials are unreasonable.

According to construction entrepreneurs, the price stated at the time of signing a contract is often different by the time work on the project actually begins, as construction material prices have already increased. They say rising costs have therefore become one of the reasons for delays in project completion.

Entrepreneurs complain that they are suffering because the government has failed to address these issues.

In Nepal, construction materials such as bitumen and steel rods are imported from countries including the Gulf nations, India, Singapore and Russia.

There are more than 12,000 construction entrepreneurs in Nepal, with around 2.5 million people directly and indirectly employed in the sector.