Road Construction Projects in Karnali Affected by Bitumen Shortage and Price Hikes

Surkhet. The Karnali government is constructing approximately 13.9 kilometers of road on the Baddichaur-Khambagade section of the Madan Bhandari Highway in western Surkhet.

The work on this section, which started in July 2022, was supposed to be completed by June 2023, but was delayed due to a lack of momentum. The project deadline has been extended until next June, and work only gained speed after the last Tihar festival.

Even if all work is not completed by June, the contractor company, Anak Construction, had a plan to blacktop at least 8 kilometers. However, the work has stalled due to the unavailability of bitumen, which is necessary for blacktopping the road.

Anak Construction representative Shankar Rawat said that the blacktopping work could not even begin due to the bitumen shortage. 'Due to the bitumen problem, blacktopping work has not started. We will do graveling, drainage, and other related work,' he told RatoPati.

The physical progress on this 42.4761 million cost road section is only about 40 percent so far.

The blacktopping work on the Mulpani-Ranighat road in Birendranagar, considered another important project of the provincial government, has also stopped. According to Premchandra Pandey, an engineer at the Infrastructure Development Directorate, 1.6 kilometers have been blacktopped so far.

By June, 7 kilometers should have been completed, but the work has been halted due to a shortage of bitumen and petroleum products, he said.

It is not just these two roads; many large and small road projects of the Karnali Provincial Government are in crisis due to the bitumen shortage, soaring fuel prices, and construction material costs.

Even large road development projects operated by central government bodies in Karnali Province, such as the Madan Bhandari Highway, Karnali Highway, Bheri Corridor, and Karnali Corridor, are affected, in addition to roads being constructed by the provincial government.

According to the Road Division Office, Surkhet, the Surkhet office had a plan to blacktop 2 kilometers of the Karnali Highway section this year. The deadline was until August, but the work has now stopped.

Similarly, Rupesh KC, information officer at the Road Division Office, Surkhet, states that although there was a plan to blacktop 20 kilometers of the Chinchu-Jajarkot road section within this year, it has been affected by reasons such as bitumen shortage.

'Contractor companies are working in some places with the bitumen they have in stock,' he told RatoPati. 'Most of the work that requires new procurement for blacktopping has stopped.'

The period from February to June is considered important for road project construction, but stakeholders say that the price increase of essential materials for the construction sector due to the West Asian (Iran) war during this period has affected the pace of road development in the entire Karnali region.

Premchandra Pandey, an engineer at the Infrastructure Development Directorate, Surkhet, says that some road projects have been affected by the bitumen shortage and the high cost of petroleum products, while some have been delayed due to payment issues.

'Contractors who are working with the stock of bitumen are finding other materials more expensive,' he said. 'As a result, projects that should have been completed this year and multi-year road infrastructure works that should have been completed according to the target appear to be affected.'

Due to the increase in international fuel prices caused by the Iran war, the supply of construction materials has been disrupted.

There is concern in the provincial government that the pace of capital budget implementation this year will not even reach 40 percent due to the halt in infrastructure work. The province had an annual capital budget of 19.9827 billion rupees in the current fiscal year. As of the end of March, only 17.16 percent, or 3.4287 billion rupees, had been implemented.

The Karnali Provincial Government had set a target to blacktop 161 kilometers of roads within the province this year. However, only 53 kilometers have been blacktopped as of the end of March. The remaining roads need to be blacktopped within the next 3 months, but this is not possible due to the Iran war.

The provincial government aims to construct 139 kilometers of gravel roads, 184 kilometers of mat roads, and 96 kilometers of road drainage and other related works. Similarly, the provincial government's plan to construct 44 road bridges and 51 buildings has been affected.

To achieve these targets and plans, the Ministry of Physical Infrastructure and Urban Development was allocated a budget of 11.0422 billion rupees this year. However, only 19 percent of the budget had been implemented as of the end of March. Among these, the implementation of the development budget is very weak.

Government officials say that about 50 percent of development work has decreased due to the increase in diesel and petrol prices, leading to a shortage of bitumen for blacktopping.

Ramesh Subedi, spokesperson for the Ministry of Physical Infrastructure and Urban Development and CDE, says that most of the road infrastructure projects that were supposed to be completed this year will require an extension of their deadline.

'The price of petroleum products has increased due to the Iran war, but even at the increased price, bitumen is not available,' he told RatoPati. 'This has greatly affected blacktopping. Construction entrepreneurs are saying that the prices of cement and rebar have increased.'

According to him, important road infrastructure works under the RCIIP projects were underway. They were about to be completed, but have been halted due to the impact of the Iran war.

'Looking at it this way, our estimate is that only about 70-75 kilometers out of the 161 kilometers blacktopping target will be completed by the end of June,' he added.

There is concern in the provincial government that the pace of capital budget implementation this year will not even reach 40 percent due to the halt in infrastructure work. The province had an annual capital budget of 19.9827 billion rupees in the current fiscal year. As of the end of March, only 17.16 percent, or 3.4287 billion rupees, had been implemented.

A minister in the provincial government says that even reaching 50 percent capital expenditure will be difficult if a large portion of the remaining budget for infrastructure is not implemented.

Less than 50 percent blacktopping likely under central government projects

Not only the province, but the Road Division Surkhet under the central government had set a target to blacktop 35 kilometers of roads, including the Karnali Highway Corridor, Bheri Corridor, and Dailekh Road, within this year. However, due to the current problems, it seems that more than 10 kilometers cannot be blacktopped, according to Rupesh KC, information officer at the Road Division Office, Surkhet.

'Most of the work has stopped. Work that requires new procurement is completely stopped, except for what is in stock,' he said. 'We are also in no position to force it.'

Construction entrepreneurs stressed by price hikes

Manav Bam, general secretary of the Federation of Contractors' Association Nepal, Karnali Province, says that since February, there has been a shortage of construction materials along with an unexpected price increase. Because of this, the projects are not progressing as they should have.

Construction entrepreneurs working in Karnali have demanded an extension of the deadline, stating that the construction industry is on the verge of collapse due to the excessive and unexpected price increase in fuel-related materials and the shortage of construction materials.

'According to Nepal's practice, the time for construction work and capital expenditure is March, April, and May,' he said. 'It has greatly affected projects from the transportation of construction materials using petroleum products to cooking and road blacktopping.'

According to him, the price of diesel and kerosene has increased by 100 percent, from 130 rupees per liter before February.

Similarly, the price of bitumen has also increased from 80-90 rupees to over 150 plus VAT. Even at the increased price, bitumen is not available.

'We hear it's available in Birgunj, but there's no certainty when it will be delivered,' he said.

Demand for extension of deadline for all projects, including compensation

Construction entrepreneurs working in Karnali have demanded an extension of the deadline, stating that the construction industry is on the verge of collapse due to the excessive and unexpected price increase in fuel-related materials and the shortage of construction materials.

The Federation of Contractors' Association Nepal, Karnali Province, said in a press release, 'Due to the current serious situation, there is no possibility of completing the construction projects within the predetermined time.'

Therefore, the Federation has requested all relevant government bodies to take necessary initiatives for the extension of the deadline for all projects, including bank guarantees, insurance, and additional compensation.