FCAN urges govt to declare 'construction holiday' until material prices stabilise

KATHMANDU: Federation of Contractors' Associations of Nepal (FCAN) has urged the government to declare a 'Construction Holiday' until construction material prices stabilise. The federation said soaring input costs are threatening ongoing projects and squeezing contractors.

In a statement, FCAN General Secretary Roshan Dahal said the heavy price hikes in fuel and other materials during the peak construction season will impose a “massive financial burden on construction entrepreneurs and increase infrastructure costs,” and warned the federation may suspend work on all projects until prices level off. “Therefore, we inform that FCAN will be forced to suspend construction work on all projects until price increases stabilise,” the statement said.

FCAN linked the recent price rises to conflicts in the Middle East and West Asia and criticised the Nepal Rastra Bank’s price index as not reflecting real market conditions. The federation also accused a small number of importers of exploiting the election atmosphere to form a cartel and create an artificial shortage of bitumen, a key material for road construction.

The statement warned that the bitumen shortage, combined with price increases of up to Rs 40 per litre above booking prices, risks damaging roads prepared for blacktopping and is causing 'double the pain' for contractors. FCAN said India’s recent ban on bitumen exports has further aggravated the domestic shortage.

FCAN also said some industrialists have raised prices of iron rods and cement amid the election period, increasing costs for both public and private infrastructure projects. According to the statement, iron rod prices have risen from Rs 85 to Rs 100 per kilogram, while cement prices have increased by up to Rs 50 per sack. The federation added that reduced production by some manufacturers through cartelling, together with delayed payments to contractors, has deepened the sector’s distress.

Through the statement, FCAN demanded that relevant government agencies arrange price adjustments for each project in line with the Public Procurement Act and Regulations to reflect recent input cost increases, and called on authorities to take immediate steps to stabilise supply and prices to avoid disruption of construction activity.