Construction Entrepreneurs Submit Memorandum to Department Over Price Hikes

Kathmandu. Today, the Federation of Construction Entrepreneurs' Nepal (Fekan) has submitted a memorandum to the Department of Water Supply and Sewerage Management stating that it is unable to purchase due to the price increase of construction materials. The federation submitted the memorandum while construction entrepreneurs have been protesting for the past five days.

According to the federation, the price of diesel, which was Rs 139 per liter before the Russia-Ukraine war, has now reached Rs 225. Similarly, the price of bitumen, which costs Rs 75 per kg, has increased to Rs 155. The federation claims that construction entrepreneurs have already suffered a loss of approximately Rs 10 billion due to the unexpected price increase in fuel and construction materials.

Even though neighboring country India has already adjusted prices in proportion to the price increase in fuel and construction materials, the Nepali government has ignored repeated requests and the ultimatum given on May 22, 2079 (Bikram Sambat), the memorandum states.

'It is no longer possible to work at the old rates and estimates. Since every work done will result in a loss, entrepreneurs cannot participate in any construction work,' the memorandum states.

The federation has put forth the following demands to the government:

1. A system for scientific price adjustment should be implemented in all types of contracts.

2. Entrepreneurs whose work has been halted due to adverse circumstances should not be blacklisted or have their bank guarantees forfeited.

3. Project deadlines should be extended and budget management should be done as work cannot be completed on time.

It has also been warned that the government will be solely responsible for all consequences arising from the halt in construction work. Considering that the construction industry contributes 13 percent to Nepal's Gross Domestic Product and provides employment to more than 2 million people, this strike is likely to affect the country's overall economy.