Construction Sector Stalls Amid Severe Shortages and Soaring Prices of Materials and Fuel

Kathmandu. The country's construction sector is on the verge of collapse due to the severe shortage and excessive price hikes of construction materials, fuel, and gas. The direct impact of internal elections held over the last two months and the escalating international conflict is now evident in the construction industry.

Rabi Singh, President of the Construction Entrepreneurs' Federation, has demanded that the government declare a construction holiday, stating that work cannot proceed under the current circumstances. According to President Singh, the government's focus remained solely on the elections, and as the economy struggles to cover even routine expenses, there has been a serious contraction in capital expenditure.

Development expenditure has only reached about 19% so far, and there is little prospect of the budget increasing in the near future. Construction entrepreneurs are facing further distress as the Ministry of Finance attempts to cut the budgets of development ministries.

The fuel supply system in Nepal has been affected, particularly due to the ongoing war in the Gulf region internationally. There has been no smooth supply of fuel and other essential materials for the past 14 days.

Singh alleges that some middlemen and businesspeople are exploiting this opportunity by creating artificial shortages of materials like bitumen and selling goods they bought cheaply at inflated prices. Following the uncertainty in the international market, the price of construction materials in the local market has increased by up to one hundred percent.

The shortage of gas over the last 2-3 months has made it difficult to employ laborers in the construction sector. Business owners state that the administration's ban on selling fuel in bottles has created even greater problems in operating machinery. With the unexpected surge in the prices of fuel, steel bars, and bitumen, the cost of all projects, large and small, has increased, leading to a situation where work cannot be sustained.

Stating that a complex situation has arisen where construction work cannot move forward, the Federation has urged the government to take special measures to solve the problems facing the construction sector and provide relief to entrepreneurs. Business owners warn that many construction companies will go bankrupt if a legal 'holiday' is not declared to temporarily suspend construction activities under the current situation.